In conjunction with a January sales report that included a 19% decline in total sales, Memphis, TN-based general merchandise retailer, Fred's Inc (Nasdaq: FRED
), revealed a strategic plan focused on "upgrading the company's real estate program for upside potential." Fred's will close 75 underperformers of its 716-store portfolio, reposition and reduce corporate overhead by 10% and initiate multiple merchandising programs; all of which it expects to result in $11 million in annualized cash savings in the second half of this year.
Fred's will close all 75 stores, which contributed $112 million in annual sales, in 2008; distribution centers will not be affected. The average Fred's is 15,000 square feet.
Further, the company will slow new store openings in 2008 to 18 general merchandise stores and 15 pharmacies. This contrasts to Fred's 2007 plan, which involved the opening of 35 to 40 general merchandise and 15 to 25 new pharmacies.
This article appears in "CoStar's Retail News Roundup: Feb. 10 to Feb. 16, 2008," a weekly feature written by CoStar News Senior Editor Sasha M. Pardy. In this issue, CoStar reports on January retail sales results; year-end results at CBL, Kimco and Regency Centers; expansion plans at Gymboree and Benihana; new retail developments in AZ, MO, NV and FL; acquisition activity at Steadfast, Ram Real Estate, Children's Place; store closings, cutbacks or bankruptcy at Fred's, Macy's, SCORE! and Yum Brands; sustainability at Darden, Wells Fargo, Whole Foods, HSBC, Starbucks, Kohl's and Staples; personnel announcements at Saks, Circuit City, Regency Centers; and more.