Local stores uncertain about closure
Published 12:00 am Sunday, February 10, 2008
THE SELMA TIMES-JOURNAL
Officials at Fred’s have said they plan to close 75 underperforming stores to increase profits, but local store managers say they aren’t worried.
The announcement was made Friday. The company didn’t say when it would begin closing the stores, except that they would be shuttered this year.
The sales contribution of the 75 stores slated for closure was $112 million in 2007, with approximately $9
million in operating loss.
Memphis, Tenn.-based Fred’s stock slipped a couple of weeks ago 21 cents a share to $8.63 after the company said same-store sales decreased 1.2 percent in January. Industry analysts had forecast a 0.9 percent decline. Same-store sails are a key measure of a store’s health.
Despite the news, Fred’s managers in Selma and surrounding counties have taken a wait-and-see attitude.
Selma store manager Marcella Matthews said Saturday she didn’t know anything about closing.
Shasta Grimes, a manager at the Camden location, which has a pharmacy, said Fred’s managers didn’t know which stores would close or when.
Marion store manager Teresa Swindle declined to talk about the move and referred all questions to Fred Stores Inc. corporate headquarters.
The Selma Times-Journal attempted to contact a spokesperson for Fred’s but was unsuccessful.
Fred’s has 716 stores, including two dozen franchises.
The closures will not affect operations of the company’s two distribution centers, according to a prepared statement by the company.
The anticipated cost of the restructuring is approximately $26 million, including $16 million to $18 million in non-cash expenses primarily associated with the write-down of inventory and fixed assets related to the store closings.
The balance of approximately $8 million to $10 million in expenses involves cash charges related to lease buyout costs.