MEMPHIS — Mike Bloom resigned late last month as chief executive officer of struggling Fred’s Inc. Secretary and chief financial officer Joseph Anto was named interim CEO.
The resignation came after the chain postponed the release of its fourth quarter and 2017 full-year results. The retailer pushed back the release date when it announced plans to sell its specialty pharmacy business. On May 7 Fred’s announced that it agreed to sell certain assets of its EntrustRx specialty pharmacy unit to a subsidiary of CVS Health for $40 million plus the value of inventory.
Fred’s, which had been poised last year to buy enough Rite Aid Corp. stores to have made it the third-largest drug chain in the country — has been seeking a turnaround.
For the third quarter ended October 28, the retailer reported a net loss of $51.8 million, or $1.38 per share, compared to a net loss of $38.4 million, or $1.05 per share, a year earlier. Same-store sales and customer traffic trends at the front end were negative year over year, but improvement was visible on a month-to-month basis.
The chain was prepared to acquire up to 1,200 Rite Aid stores to secure the Federal Trade Commission’s approval of Walgreens Boots Alliance’s (WBA’s) takeover of the rest of Rite Aid. But FTC objections to the bigger deal proved insurmountable, and WBA and Rite Aid canceled their merger and their agreement with Fred’s in June.
“After the company was not able to purchase certain assets from the Rite Aid Corporation and following the end of the 2017 fiscal year, the timing was right, both for Mike and the company, for him to step down,” Fred’s chairman Heath Freeman explained.
Bloom joined Fred’s as president and chief operating officer in January 2015 and was named CEO in August 2016, succeeding Jerry Shore, who retired.