Fred's Pharmacy CEO Michael Bloom resigned last week "to pursue other opportunities," the drug store retailer said in a press release Friday. Bloom also resigned from the company's board of directors. Fred's said his departure is "not the result of any disagreement with the company or its operations.”
Joseph Anto, chief financial officer and executive vice president with Fred's since February, is now serving as interim CEO in Bloom's place. Before joining Fred's, Anto served as an executive with newspaper company MediaNews Group (which later became part of Digital First Media).
Fred's also said it is postponing its fourth quarter report and conference call until May 4, in light of a decision to sell its specialty pharmacy business, according to a separate press release.
Fred's is looking for a way forward after a move to more than double its size failed last year.
The drug store retailer aimed to grow by pursuing nearly 1,000 stores that would have been up for grabs as Walgreens pursued a deal with Rite Aid. Fred's proposed acquisition of stores was designed to placate federal regulators reviewing the Walgreen-Rite Aid deal, but analysts questioned it, as Fred's would have racked up a massive debt load to buy the stores. In any case, the deal fell through after Walgreens, facing pushback from the Federal Trade Commission, nixed its initial deal with Rite Aid.
This Fred's, which runs some 600 stores and faces mounting financial challenges, said it is focused on executing its "Plan B," and in April Fred's postponed an upcoming earnings release as it pondered the sale of its specialty pharmacy business, according to the Memphis Business Journal.
Bloom's departure adds to recent turnover at the retailer. In January, the company's CFO resigned, and the next month the retailer appointed Anto in the chief finance spot. Now he's sliding into the chief executive position, at least for the time being.
The failed Walgreens-Rite Aid merger is a factor in the departure of Bloom — who joined just two years ago —according to Chairman of the Board Heath Freeman. "[T]he 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," Freeman said in a statement.
Fred's reported in December that its top-line sales dropped 4.5% year over year in the third quarter, to $493.6 million, and same-store sales fell 0.8%. The retailer's net loss for the quarter widened to $51.8 million. Its loss by the end of October was $117.8 million, a widening of more than 167% over the prior-year period.