FOR IMMEDIATE RELEASE                 Contact:          Richard B. Witaszak
                                                        Chief Financial Officer
                                                        (901)362-3733, Ext. 2217

         FRED'S COMPLETES ACQUISITION OF 17 STORES FROM CVS CORPORATION
                         ------------------------------
                COMPANY ANNOUNCES FIVE-FOR-FOUR STOCK SPLIT AND A
                     25% INCREASE IN THE QUARTERLY DIVIDEND

MEMPHIS,  Tennessee  (November 24, 1997) - Fred's, Inc.  (Nasdaq/NM:FRED)  today
said that it has completed the  previously  announced  acquisition  of 17 stores
from CVS Corporation in a cash transaction.  The acquisition  strengthens Fred's
presence in Alabama, Georgia, Mississippi, and Tennessee, where these stores are
located.

         Michael J. Hayes,  Fred's President and Chief Executive Officer,  noted
that the stores involved in this transaction  currently generate annual sales in
excess  of $50  million.  He said the  acquired  stores  should  begin to have a
positive impact on Fred's earnings in the first quarter of 1998.

         Separately,  the  Company  announced  that its Board of  Directors  has
approved a  five-for-four  stock split,  to be effected as a 25% stock dividend.
The new shares - one  additional  share of common  stock for every  four  shares
currently  held by  stockholders  - will be distributed on December 19, 1997, to
stockholders  of record on December 5, 1997.  Fred's  currently  has 9.4 million
common shares outstanding. Cash will be paid in lieu of fractional shares.

         Fred's also  announced  that its Board has  declared a  quarterly  cash
dividend  of $.05 per share,  payable on the same record date as the stock split
for  both  old and new  shares.  This  represents  an  increase  of 25% from the
previous rate of $.04 per share per quarter,  adjusted for the stock split.  The
higher  dividend  will be paid on December  19,  1997,  together  with the stock
dividend.

         Commenting on the announcement,  Hayes said, "It is gratifying that the
Company's  continued  growth and its strong  financial  position has enabled the
Board to  declare  this  split  and  increase  the cash  dividend  rate.  We are
confident that the additional  shares  outstanding will benefit  stockholders by
increasing the trading activity, visibility and liquidity of our shares."

     Fred's,  Inc.  operates  258  discount  general  merchandise  stores in the
southeastern  United  States.  The Company also markets goods and services to 31
franchised Fred's stores.