- Discount retailer Fred's is moving to close 159 stores across 13 states in a bid to cut costs.
- Fred's CEO said the 557-store chain may seek to restructure or sell the whole company.
- According to UBS, more than 15,000 stores have been shuttered or announced closings around the U.S. in the last two years.
Regional retailer Fred's on Thursday said it would close 159 stores in 13 states as the more than 70-year-old discount chain seeks to avoid joining the growing list of defunct merchants.
The 557-store chain said it expects to close unprofitable or weaker stores by the end of May, and has retained a financial adviser to explore options that often include a restructuring or potential sale. (See the full list of stores holding liquidation sales here.) The company's 398 other stores will remain open.
"After a careful review, we have made the decision to rationalize our footprint by closing underperforming stores, with a particular focus on locations with shorter duration leases," Fred's CEO Joseph Anto said in a statement.
The closing stores represent more than a quarter of Fred's stores, with Mississippi, Alabama, Georgia and Tennessee hardest hit by closures.
Sales at Fred's stores open at least a year fell 4.9 percent in the first nine months of 2018, compared with a year earlier. The company's shares have plunged almost 80 percent since the company scrapped its bid to buy 1,200 Rite Aid drugstores in 2017. The stock was down more than 4 percent in afternoon trading.
The scenario playing out at Fred's and among other retailers is likely to accelerate as more Americans shop online, according to research out this week from UBS. About 75,000 of the nation's nearly 740,000 stores are likely to close by 2026 if consumers continue to migrate to online shopping, the investment bank predicts.
By UBS' tally, more than 15,000 stores have been shuttered or announced closings around the U.S. in the last two years. Meanwhile, Amazon's sales in North America grew $35 billion last year, the equivalent of some 7,700 stores, according to the bank.
Moody's recently warned that more than a dozen big-name U.S. retailers overloaded with debt could go into. They include chains such as J.Crew, J.C. Penney, Neiman Marcus, PetSmart and Pier 1.