- Fred's CFO Ritwik Chatterjee resigned from his position on Aug. 23, the company said last week in a securities filing.
- Chatterjee is set to work with the company as a consultant to provide transitional and other services, the retailer said. The terms of the consulting agreement are still being negotiated.
- Chatterjee's departure is the second C-suite change in recent weeks. Early in August, Fred's announced it had named Michael Ladd, previously chief stores officer, as its new chief operating officer. After becoming COO, Ladd vacated the chief stores spot. Fred's has not announced a replacement yet.
Chatterjee leaves a company in a tight financial position, as Fred's winds down much of its remaining store footprint and tries to plug expanding losses.
In July, as it announced nearly 130 store closures — which came on top of successive announcements totaling more than 300 stores since April — Fred's said that it was working to simplify its store portfolio, refocus its product mix and repay debt. The company has also laid off more than 150 employees at a Memphis service center.
As Fred's tries to remove costs from its business, its crimped liquidity has created a dangerous spiral. CEO Joe Anto told analysts in June that first-quarter sales declines were mainly the result of out-of-stocks that were "exacerbated by our constrained liquidity situation," according to a Seeking Alpha transcript.
However, the retailer has managed to slow its cash burn and reduce the balance on its asset-backed loan. Fred's has previously reported that it was in forbearance with a group of lenders, working to refinance its lending facility with a set of milestones that Fred's has to hit in order to close on the refinancing.
In April, the retailer was reported to be working with restructuring firm Malfitano Partners with an eye toward closing stores. The rapid contraction of its footprint comes about two and a half years after Fred's was looking to significantly expand its footprint. The retailer planned to buy of 865 stores that in 2016 were a planned spinoff from a Walgreens-Rite Aid merger, which would eventually collapse under federal antitrust scrutiny.
But, as the Wall Street Journal reported at the time, even as Fred's mulled beefing up by buying the stores, the retailer was closing stores and losing money.