Exhibit 99.1

                 Fred's Names Michael T. McMillan to Its Board

    MEMPHIS, Tenn.--(BUSINESS WIRE)--Feb. 1, 2007--Fred's Inc.
(NASDAQ:FRED) today announced that its Board of Directors has named
Michael T. McMillan to the Board, effective February 5, 2007. Gerald
E. Thompson, R.Ph., who in August 2006 assumed the role of Executive
Vice President and Chief Operating Officer of Fred's Inc., will resign
from the Board effective this same date and continue in his managerial
responsibilities with the Company. With these changes, Fred's Board
will be composed of seven members, five of whom are independent
directors.

    Michael T. McMillan currently serves as Director of Sales
Operations for Pepsi-Cola North America, a Division of PepsiCo, where
he has spent the last 22 years in various roles including marketing,
sales, franchise development, and general management of its bottling
operations.

    Commenting on the announcement, Michael J. Hayes, Chairman and
Chief Executive Officer of Fred's, said, "We appreciate Jerry
Thompson's efforts during his tenure on the Board, and are delighted
to have him now as an active member of our management team. We are
pleased and fortunate to have Mike McMillan fill the role of an
outside Director, bringing his marketing and operational expertise
that is so closely associated with the Southeast market, where our
Fred's stores are located. We look forward to his counsel and
contributions in the future as we continue to pursue our long-range
objectives."

    Fred's Inc. operates 700 discount general merchandise stores,
including 24 franchised Fred's stores in the southeastern United
States. For more information about the Company, visit Fred's website
at www.fredsinc.com.

    Comments in this news release that are not historical facts are
forward-looking statements that involve risks and uncertainties which
could cause actual results to differ materially from those projected
in the forward-looking statements. These risks and uncertainties
include, but are not limited to, general economic trends, changes in
consumer demand or purchase patterns, delays or interruptions in the
flow of merchandise between the Company's distribution centers and its
stores or between the Company's suppliers and same, a disruption in
the Company's data processing services, costs and delays in acquiring
or developing new store sites, and other contingencies discussed in
the Company's Securities and Exchange Commission filings. Fred's
undertakes no obligation to release revisions to these forward-looking
statements to reflect events or circumstances after the date hereof or
to reflect the occurrence of unforeseen events, except as required to
be reported under the rules and regulations of the Securities and
Exchange Commission.


    CONTACT: Fred's Inc.
             Jerry A. Shore, 901-362-3733, ext. 2217
             Executive Vice President and Chief Financial Officer