Fred's Inc fka FREDQ

[236T568]

Item 2.05. Costs Associated with Exit or Disposal Activities.



On April 5, 2019, the Board of Directors (the “Board”) of Fred’s, Inc. (the “Company”) approved a plan to close 159 underperforming stores (the “Plan”). The decision to close these stores is the result of a comprehensive evaluation of the Company’s store portfolio, which examined historical and recent store performance and the timing of lease expirations, among other factors. The Company intends to close the stores by the end of May 2019.



The Company is currently unable in good faith to make a determination of an estimate of the amount or range of amounts expected to be incurred in connection with the Plan, both with respect to each major type of cost associated therewith and with respect to the total cost, or an estimate of the amount or range of amounts that will result in future cash expenditures. The Company will file an amendment to this Current Report on Form 8-K after it determines such estimates or ranges of estimates.



The timing of the store closures is subject to change until finalized. The actual timing may vary materially based on various factors. See “Forward Looking Statements” below.



Item 2.06. Material Impairments.



The information set forth in Item 2.05 is incorporated herein by reference. On April 5, 2019, the Company concluded that a material charge for impairment is required in connection with the Plan. The Company is currently unable in good faith to make a determination of an estimate of the amount or range of amounts of impairment charge to be incurred in connection with the Plan, or an estimate of the amount or range of amounts of the impairment charge that will result in future cash expenditures. The Company will file an amendment to this Current Report on Form 8-K after it determines such estimates or ranges of estimates.



Item 7.01 Regulation FD Disclosure.



On April 11, 2019, the Company issued a press release announcing the Plan and the retention of PJ Solomon in connection with the evaluation of strategic alternatives as more fully described under Item 8.01 below. A copy of that press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.



Item 8.01. Other Events.



On April 10, 2019, the Company retained PJ Solomon to assist the Board in undertaking a comprehensive review of the full range of strategic alternatives available to the Company, which may include an evaluation of the Company’s current operating plan, as well as potential alternatives to maximize value.



The Company has not set a timetable for completion of the evaluation process. As the Company indicated in its press release, no decision has been made to pursue any specific strategic transaction or any other strategic alternative, and there can be no assurance that the Board’s exploration of strategic alternatives will result in the completion of any transaction or other alternative. The Company does not intend to discuss or disclose developments with respect to this process unless and until the Board has approved a specific transaction, or otherwise deems further disclosure is appropriate or if disclosure is required by applicable law.


https://www.sec.gov/Archives/edgar/data/724571/000161577419005625/s117373_8k.htm