The deal, expected to be complete in the first quarter of next year, will continue Fred’s effort to monetize noncore assets as part of a financial turnaround plan.
“With this agreement, we have taken a major step toward achieving one of our main goals of eliminating our debt balance,” said Joe Anto, Interim CEO and CFO of Fred’s. “We look forward to partnering with Walgreens to transition our pharmacy patients in these locations as smoothly as possible.”
Once complete, Fred’s will operate 162 pharmacies in 600 general merchandise and pharmacy stores. Patients are being notified of the transition to Walgreens.
The retreat from the pharmacy business by Fred’s comes after the retailer was unable to push into the healthcare industry when its deal to buy hundreds of Rite Aid stores dissolved last year. Walgreens attempted to buy Rite Aid and obtain approval from the Federal Trade Commission by selling 865 Rite Aid stores to Fred’s. The initial Walgreens-Rite Aid deal didn’t pass regulatory hurdles, so instead, Walgreens bought 2,186 Rite Aid sores, which simultaneously prevented Fred’s from buying the drugstores.
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