A Fred’s bankruptcy is underway and it will mean major changes for shoppers of the discount retailer.
The bankruptcy was announced by Fred’s (NASDAQ:FRED) via a filing with the Securities and Exchange Commission (SEC). In this filing, the company notes that it is seeking Chapter 11 bankruptcy protection. The company plans to continue operations throughout the proceeding.
Unfortunately for Fred’s shoppers, there won’t be a return of the chain after this bankruptcy. Instead, the Fred’s bankruptcy will have the company closing down its retail locations. Going out of business sales have already started and stores will be closing down over the next 60 days.
What’s still unclear is how the Fred’s bankruptcy will affect the retail chain’s pharmacies. The retailer is currently looking to sell its remaining pharmacy assets as part of the bankruptcy. Customers can also continue to fill prescriptions as most of these locations during the bankruptcy process.
Employees that work for Fred’s will also continue to be paid until the company goes out of business. It will also still be offering benefits to its employees during this time. Fred’s also expects to continue making full payments to suppliers during the bankruptcy process.
The Fred’s bankruptcy comes as physical retailers continue to struggle in the U.S. This is due to the rise of online shopping and has already resulted in the death of several of retailers in the last few years.
FRED stock was down 49% as of Monday afternoon.
As of this writing, William White did not hold a position in any of the aforementioned securities.