Fred’s Super Dollar bullish on 2015 results with new team in place
MEMPHIS, Tenn. — Despite the fact that Fred's Super Dollar is gravitating toward a retail business model where retail pharmacy plays a more centric role, Fred's is not abandoning its value store heritage, Mike Bloom, Fred's president and COO, told analysts Thursday morning. Quite to the contrary. Bloom, a veteran of both the dollar store channel and retail pharmacy with stints at Family Dollar and CVS Health, respectively, is forming a team dedicated to capitalizing on the promise of retail pharmacy with a focus on delivering on that dollar store value proposition across the front-end.
"We perform a role in these rural markets that is very important for the consumer. We are a general store, and we are still a value store," Bloom said. "One of my learnings from being here just a short three months is it's pretty shocking to me as I look across the general merchandise categories, the volume that we generate in some of these businesses. And to me that says we play a very important role in these markets," he said. "So I do not see us turning into a big-box drug store; I see us being a very strong hybrid model, with a great pharmacy business [and] a strong health and beauty aid business, which I think we can improve upon. … But it's very important that we balance that with that general merchandise, with those categories that our customer expects Fred's to have and has relied on us for those for many years."
"As we considered Bryan Pugh for the position in merchandising, he was heavily involved in Walgreens' program to evolve their product mix and he brings a great strength in really understanding what our customer is looking for in our store beyond a pharmacy," added Jerry Shore, Fred's CEO. "Our team that we're putting into place, with Craig [Barnes] on the sourcing and the import products side, it's an excellent team to get us to that model that Mike is talking about."
Fred's is expecting to drive both improvements in sourcing and operational execution as well as improvements in customer care and communication to drive stong comparable sales and positive business results going forward.
For the year ended Jan. 31, Fred's posted a loss of $28.9 million, or 79 cents per diluted share compared with a net income of $26 million in the year-ago period. Adjusted net loss for 2014 was $7.3 million or 20 cents per diluted share.
Fred's total sales for fiscal 2014 were $2 billion, an increase of 2%. On a comparable store basis, fiscal 2014 decreased 0.6% versus an increase of 0.6% for the year-earlier period.
"Although our pharmacy department posted another strong script performance in 2014, the year overall was challenging as we dealt with problems in the general merchandise side of our business and the expiring pharmacy supply contract," Shore stated. "During the last half of the year, we worked aggressively to clear inventory, close underperforming stores and improve supply chain strategies, among other things. Clearly, those steps were painful from a near-term perspective, but necessary in terms of our goal to restore Fred's to profitability, expand gross margins and capitalize on the positive business in the pharmacy department."
Shore noted that Fred's announcement Wednesday of its acquisition of specialty pharmacy operator EntrustRx, when completed, will bring additional resources to Fred's specialty pharmacy operations, EIRIS Health Services.
"We enter 2015 with a strong sense of optimism because of the momentum that has been building during the past several months with regard to our emphasis on process improvement, expanding our pharmacy business, building talent across the organization and refining our store model," Shore said. "We now have leadership in place with the credentials and experience to execute our strategic plan and drive strong financial improvements, as our earnings guidance reflects, and build the base for even stronger returns in the future for our shareholders."
Total sales for the first quarter of 2015 are expected to increase in the range of flat to up 2%, Fred's projected. Comparable store sales for the first quarter also are expected to be flat to 2% compared with a decrease of 1.9% in the first quarter last year.
The company expects total sales for the year to increase 10% to 15% which includes the impact of the acquisition of Reeves-Sain Drug Store and the EntrustRx specialty pharmacy business. Comparable store sales for the year are expected to increase 4% to 6% compared with a decrease of 0.6% in the prior year.
Scrub Daddy intros new cleaning solution
BY Ryan Chavis
Image Credit: ScrubDaddy.com
CHICAGO — Scrub Daddy, the company launched into the spotlight on ABC’s “Shark Tank” for its smily-faced sponge, earlier this month introduced Sponge Daddy, a scrubbing tool that the company says represents a “leap forward” in technology and innovation.
The Sponge Daddy takes the form of a traditional rectangular sponge, but adds a layer of ResoFoam on the reverse side, the company said. As a result, the two different textures offers a broader range of applications for the consumer. The product was unveiled at the 2015 International Home + Housewares Show in Chicago.
“Few industries suffer through 40 years of stagnation, as has the sponge. Scrub Daddy’s success proved the public’s pent-up demand for an innovative sponge that’s always happy to get the job done,” said Aaron Krause, CEO of Scrub Daddy. “Sponge Daddy adds new textures and countless uses, all with the same reliable performance and results.”
More than 10 million Scrub Daddy units have been sold worldwide, the company stated. Krause brought the Scrub Daddy sponge to “Shark Tank,” where “shark” Lori Greiner took interest in the product. The company went ion to find direct sales success. Its network of retail partners that includes such retailers as Kroger and Bed Bath and Beyond as well as select Walmart locations.
Walgreens vet Bryan Pugh joins Fred’s Super Dollar
MEMPHIS, Tenn. – Fred's Super Dollar on Wednesday announced several key management changes. Walgreens veteran Bryan Pugh has been named chief merchandising and marketing officer; Craig Barnes has been promoted to EVP supply chain, global and domestic logistics; and Mike Holligan has been promoted to EVP store operations.
"Working together with Mike Bloom, our president and COO, we are now assembling a solid, experienced management team that complements our pharmacy team to drive growth in market share and improve profitability," stated Jerry Shore, Fred's CEO. "We are very excited about how this team has come together and the opportunities ahead for Fred's."
"I am very enthusiastic about the experience that this leadership team brings to their respective roles and the way they position Fred's to drive profitability and to grow the convenience/pharmacy-centric model," Bloom said.
Bryan Pugh brings to Fred's 30 years of retail experience. Among his many roles at Walgreen's for the last six years, he served as chief merchandising officer responsible for $27 billion in sales. Prior to Walgreen's, Pugh worked for Tesco, where he was EVP operations for Fresh & Easy Neighborhood Markets, COO and SVP merchandising and marketing for Tesco Lotus Stores.
As CMMO, Pugh will work to develop new and enhance current merchandising and marketing strategies and processes, promote stronger supplier partnerships, convert pharmacy patients to front-of-store customers, and build on the value proposition that Fred's offers its customers.
Prior to joining Fred's, Barnes held executive positions at AutoZone, CARQUEST and Delphi Automotive. He has had full responsibility for P&L management, supply chain and store operations management, global logistics, sourcing and inventory management. This move elevates his focus on supply chain as an enabler for improving operating margin. Barnes brings a unique skillset of merchandising, store operations, supply chain and sourcing that will drive the Company's plans to move from a distribution strategy to a fully integrated supply chain retailer, a critical step in becoming a low-cost operator.
In his short time as general merchandise manager, Barnes built a sourcing team, instituted improved processes and developed programs that promote supply chain improvements. The new initiatives and teamwork provides a solid foundation for Pugh and the entire Fred's organization to build upon.
Holligan's extensive experience in store operations began at Wal-Mart, where he spent 18 years before joining Fred's. While at Fred's, Holligan has successfully worked as district manager and regional VP store operations. He was a key leader in achieving store labor savings and inventory control while in those positions.
Currently, Fred's operates 661 discount general merchandise stores, including 19 franchised Fred's stores, in the southeastern United States.
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