Discount Retailer Fred's Strikes Deals to Sell More Pharmacy Assets
September 26 2019 - 7:46PM
Dow Jones News
By Aisha Al-Muslim
Discount retailer Fred's Inc. has reached two separate deals to
sell some of its pharmacy assets, including 10 drugstores and
inventory, to Walgreens Boots Alliance Inc. and ExpressRx Co. for a
total of about $16.4 million.
Walgreens is looking to buy pharmacy inventory from Fred's for
about $9.4 million, according to a filing Thursday in the U.S.
Bankruptcy Court in Wilmington, Del. ExpressRx has agreed to
purchase 10 Fred's pharmacies for about $7 million.
As part of Walgreens' offer, the drugstore chain would acquire
substantially all of Fred's pharmacy assets, including prescription
files and records, as well as retail prescription and
pharmaceutical inventory.
ExpressRx, meanwhile, intends to buy Fred's prescription files,
records, inventory, other nonpharmaceutical inventory, furniture,
fixtures and equipment, and other assets. ExpressRx plans to take
over leases at four Fred's pharmacies.
Fred's is seeking court approval for private sales without
putting the assets on the auction block. The company's lawyers say
the possibility that an auction would attract a higher bidder is
outweighed by the cost and delay of the process.
Earlier this month, Fred's filed for chapter 11 and said it
would shut down all of its stores after trying unsuccessfully for
more than a year to turn around the 72-year-old company.
Founded in 1947, the Memphis, Tenn.-based retailer's stores
generally served low-, middle- and fixed-income families in small
towns in the southeastern U.S. In an attempt to salvage the
company, Fred's sold some of its assets, reduced expenses, improved
its inventories and cut its debt levels.
Last year, Fred's sold prescription files and other assets at
pharmacies in 179 of its stores to Walgreens for about $176.7
million.
Recently, Fred's sold 38 of its retail pharmacy stores to a
subsidiary of CVS Health Corp. for $11.7 million in cash, plus $3.5
million for inventory.
A hearing on the proposed sales to Walgreens and ExpressRx is
scheduled for Oct. 16 in front of Judge Christopher S. Sontchi in
Wilmington, Del.
Write to Aisha Al-Muslim at aisha.al-muslim@wsj.com
(END) Dow Jones Newswires
September 26, 2019 19:31 ET (23:31 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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