Fred’s in $40 million deal with CVS Health
That didn’t take very long.
One week after Memphis-based discounter Fred’s announced that it was looking to sell its specialty pharmacy business, the retailer announced it has entered into a deal with CVS Health Corp. Fred’s said it has reached a definitive agreement to sell certain assets of its EntrustRx unit to a subsidiary of CVS Health for $40 million, plus an amount equal to the value of inventory of EntrustRx.” The deal is expected to close by the end of May.
“One of Fred’s top priorities for 2018 has been to monetize non-core assets and we are pleased to have reached an agreement for the sale of EntrustRx,” said Joe Anto, CFO and interim CEO, Fred’s, which operates 600 general merchandise and pharmacy stores across the Southeast. “The cash proceeds will allow us to pay down a significant portion of our debt and also be used for general corporate purposes.”
The deal is in line with CVS Health’s emphasis on its expanding specialty pharmacy business. And it comes as Anto, who was named interim CEO of Fred’s in April when Michael Bloom resigned, is looking to shed some of Fred’s non-core assets in an effort to improve the chain’s profitability. Last week, he said Fred’s was evaluating various options for its retail pharmacy portfolio.
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Camping World Holdings has strong Q1
Camping World Holdings saw its sales rise in the first quarter as the company continues to expand its RV-centric footprint.
Total revenue increased 20.4% to $1.1 billion in the quarter ended March 31. Total same-store sales rose 3.9%.
Camping World’s income from operations, net income and diluted earnings per share decreased to $49.8 million, $17.3 million, and $0.08, respectively, and reflected $19.7 million of pre-opening expenses related to the Gander Outdoors store openings. Its adjusted net Income increased 16.5% to $36.9 million, and adjusted earnings per share increased 9.7% to $0.41.
“While the unseasonably cold weather throughout a good portion of the country has likely impacted the early part of the peak selling season, we believe the backdrop across the RV industry remains strong and we continue to plan our business around a mid-single digit increase in same store sales in 2018,” said Marcus A. Lemonis, chairman and CEO, Camping World. “We remain committed to profitable growth and have not seen any changes in the overall acquisition environment.”
In the first quarter, the retailer announced five new acquisitions with six locations across five different states. It also said it plans to open eight new locations late this year and early next year “that we anticipate will begin to combine all of our brands in one location and serve a broad range of RV, outdoor and active lifestyle customers,” Lemonis said.
Camping World Holdings operates 141 Camping World retail locations in 36 states, along with such other outdoor brands as Good Sam, Gander Outdoors, Overton’s, Uncle Dan’s, and Erehwon Mountain Outfitters.
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