FRED'S, INC. ROSE'S STORES, INC.
4300 New Getwell Road P.H. Rose Building
Memphis, Tennessee 38118 218 South Garnett Street
Henderson, North Carolina 27536
SUPPLEMENT
dated August 8, 1996 to
JOINT PROXY STATEMENT AND
FRED'S, INC. PROSPECTUS
dated July 12, 1996
SPECIAL MEETINGS OF STOCKHOLDERS
August 20, 1996
Prior to the stockholders' meetings of Fred's, Inc. ("Fred's")
and of Rose's Stores, Inc. ("Rose's") to be held on August 20,
1996, management of Fred's and Rose's believe that stockholders of
Fred's and of Rose's should be aware of the following information.
Notwithstanding the last sentence in the second paragraph
under "SUMMARY--Effect of Merger and Reverse Split--Rose's Reverse
Split (page v) or the last sentence under "THE MERGER AGREEMENT--Rose's Reverse
Split" (page 18) in the Joint Proxy Statement/Prospectus," if the Reverse
Stock Split is approved by Rose's stockholders, the conversion number will be
19.8. For example, if the Reverse Stock Split and the Merger Agreement are
approved by Rose's stockholders (and the other conditions to the
Merger occur or are waived):
(i) a Rose's stockholder who held 100 shares of Rose's
Common Stock prior to the Reverse Stock Split and the Merger
will be entitled to receive 19 shares of Fred's Common Stock
and cash in lieu of the fractional share of Fred's Common
Stock;
(ii) a Rose's stockholder who held 1,000 shares of Rose's
Common Stock prior to the Reverse Stock Split and the Merger
will be entitled to receive 198 shares of Fred's Common Stock
and, cash in lieu of a fractional share of Fred's Common
Stock; and
(iii) a Rose's stockholder who held 99 (or fewer)
shares of Rose's Common Stock prior to the Reverse Stock Split
and the Merger will be entitled to receive cash in lieu of a
fractional share of Fred's Common Stock.
A NEW FORM OF PROXY CARD IS ENCLOSED. YOUR VOTE IS VERY
IMPORTANT. IF YOU HAVE NOT YET VOTED OR IF YOU WISH TO CHANGE YOUR
VOTE, PLEASE MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE
ENCLOSED, POSTAGE PREPAID ENVELOPE AS SOON AS POSSIBLE, EVEN IF YOU
PLAN TO ATTEND THE SPECIAL MEETING.
Proxy cards which are returned unmarked as to how they should
be voted will be voted FOR the approval of the Agreement and Plan
of Merger, dated as of May 7, 1996 (the "Merger Agreement"),
attached to the Joint Proxy Statement/Prospectus as Appendix I and
FOR the approval of the other proposals described therein as
recommended by the respective Boards of Directors of Fred's and of
Rose's. A stockholder who executes a proxy may revoke it at any
time before it is exercised. If you have any questions concerning
the proposed transaction, please call Rose's collect at (919) 430-2600 or
MacKenzie Partners, Inc., which is assisting Rose's, toll
free at (800) 322-2885.
