Discount retailer Fred’s Inc. has filed for bankruptcy protection and will shut down all of its stores after trying unsuccessfully for more than a year to turn around the company, WSJ Pro Bankruptcy reported. The 72-year-old company, which filed for chapter 11 Monday in the U.S. Bankruptcy Court in Wilmington, Del., has begun liquidation sales and said in court papers it expects to close all of its remaining retail stores in the next 60 days. The Memphis, Tenn.-based retailer has been struggling for some time, closing more than 440 underperforming stores through four rounds of closures that extended from April until last month, Fred’s Chief Restructuring Officer Mark Renzi said in a court declaration. Following the closures, Fred’s said in July it would have about 80 retail stores remaining. The company said that it expects to continue fulfilling drug prescriptions at most of its pharmacy locations while continuing to pursue the sale of its pharmacies as part of the court-supervised proceedings. Fred’s has lined up a bankruptcy financing package with its existing lenders Regions Bank and Bank of America Corp. that would provide for up to $35 million in new funding, subject to bankruptcy court approval. Read more.
Occupancy issues are at the heart of many significant retail cases, as detailed in the ABI publication Retail and Office Bankruptcy: Landlord/Tenant Rights, available at the ABI Store.
