Fred's Inc. (FRED) on Wednesday, Sept. 6, installed the president of activist investor Alden Global Capital LLC as its new chairman as the drug store chain unveiled second-quarter results.

Heath Freeman succeeds Thomas J. Tashjian, who retired from the board after 16 years. Tashjian became a director in 2001 and was appointed chairman in 2016.

Alden is Fred's largest shareholder, with a 24.4% stake as of Aug. 11.

Freeman joined the board on Aug. 14 as part of an amended and restated cooperation agreement between the company and Alden on Aug. 11.

His arrival comes after Memphis, Tenn.-based Fred's in April appointed Digital First Media CEO Steven Rossi and former Freightquote.com CEO Timothy Barton to its board as part of a settlement with Alden. Rossi and Barton continue to serve as directors, according to the amended pact.

Freeman's appointment also comes after Fred's deal to buy up to 1,200 Rite Aid Corp. (RAD) stores was terminated when Walgreens Boots Alliance Inc.'s (WBA) axed its $9.4 billion merger with Rite Aid in June and opted instead to buy about half of Rite Aid's stores.

"Heath brings significant retail, turnaround, and financial expertise and we determined that as Chairman, Heath will bring invaluable insights and experience as the Company continues to execute its turnaround strategy," said Fred's CEO and board member Michael K. Bloom in Wednesday's statement.

Freeman has been with New York-based Alden since its launch in 2007 and has served as president since 2014. He is vice chairman of MediaNews Group Inc., which owns the Denver Post, San Jose Mercury News and Orange County Register. Freeman co-founded boutique fitness business SLT Group Inc. in 2011, at which he is a board member. He also co-founded coffee roasting firm City of Saints Coffee Roasters in 2013.

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Earlier in his career, Freeman was an investment analyst at Smith Management. He started his career as an analyst at Peter J. Solomon Co.

Also on Wednesday, Fred's reported a net loss of $29.5 million or $0.78 per share for the quarter ended July 29, including charges totaling $30.1 million. In the year-ago period, Fred's recorded a net loss of $6.9 million or $0.18 per share.

Net sales were down 4.1% year-over-year to $507.8 million. Comparable store sales for the quarter declined 0.3% compared with a 2% decrease in the same period last year. Comparable store sales in the second quarter of 2017 included a negative 0.8% impact due to the sale of low productive discontinued inventory compared with the year-ago period, the company said.

"Our overall comparable store sales represent the best quarterly performance in the past year," said Bloom in a news release. "In addition, EPS and EBITDA, excluding non-operating charges, improved over the prior year period. We are starting to gain momentum and are seeing progress across the business."

Shares of Fred's closed at $6.74 on Wednesday, up 17%.

Fred's shareholders as of end-June include David Einhorn's Greenlight Capital, with a 3.94% stake, according to FactSet Research Systems Inc.

--Ronald Orol contributed to this article

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Editors' pick: Originally published Sept. 8.

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