Walgreens Close To Buying Rite Aid

CalItalian
Store Manager
Store Manager
Posts: 1103
Joined: October 1st, 2009, 12:25 pm
Been thanked: 39 times
Status: Offline

Re: Walgreens Close To Buying Rite Aid

Post by CalItalian »

Rite Aid is exiting South Carolina, Utah and Indiana, and will have one or two stores apiece in Mississippi, Georgia, Alabama, Maine, Rhode Island, West Virginia, Kentucky and Nevada. The company is also selling most of its stores in Colorado, Tennessee, Louisiana, Vermont, North Carolina and Massachusetts.
https://www.usatoday.com/story/money/20 ... 438450001/
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Walgreens Close To Buying Rite Aid

Post by storewanderer »

Wow, this management team at Rite Aid just can't walk away from a transaction with Walgreens can they?

This is actually interesting. Their stores in the south are garbage and lousy performers. Utah is also very poorly performing. Based on this I think they've unloaded about 500 dog stores onto Walgreens but also sold them quote a few good stores. Gutting the east coast and much of the old Brooks areas in the Northeast is a curious move.

We will see how this new Rite Aid does. With less debt, fewer dog stores, maybe the financial results will actually start to look better.

I suspect most of the states with thin store counts will be exited shortly. Except Nevada, since that one store is being remodeled right now.

Also don't see Albertsons buying the remaining Rite Aid due to heavy overlap in the west and in Acme territory.
Super S
Posts: 2690
Joined: April 1st, 2009, 9:27 pm
Has thanked: 11 times
Been thanked: 61 times
Status: Offline

Re: Walgreens Close To Buying Rite Aid

Post by Super S »

What does this mean for the west coast? Rite Aid has kicked remodels into high gear over the last couple years.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Walgreens Close To Buying Rite Aid

Post by storewanderer »

The only thing happening out west is selling 5 stores in Idaho, selling all stores in Utah (this is not a big loss), and selling most stores in Colorado.

Nothing is being sold in CA, OR, or WA.

This is not too radically different from the RAD of 1998. Back then it was 4,000 stores and 1,000 of those were out west.

Now it will be about 2,200 stores and 800 of those will be out west.

The stores out west were always far higher volume than the others so to me this leaves them with a smaller chain that will have better metrics.

Plus if they use the $5 billion they are getting fron WAG to pay down debt, it will greatly improve their financial situation going forward assuming the stores retained are solidly profitable, which I believe they are.
cathandler
Front-End Supervisor
Front-End Supervisor
Posts: 162
Joined: September 20th, 2016, 7:28 pm
Has thanked: 1 time
Been thanked: 9 times
Status: Offline

Re: Walgreens Close To Buying Rite Aid

Post by cathandler »

CalItalian wrote:Rite Aid is exiting South Carolina, Utah and Indiana, and will have one or two stores apiece in Mississippi, Georgia, Alabama, Maine, Rhode Island, West Virginia, Kentucky and Nevada. The company is also selling most of its stores in Colorado, Tennessee, Louisiana, Vermont, North Carolina and Massachusetts.
https://www.usatoday.com/story/money/20 ... 438450001/
How will one or two stores in each of those states be viable? This is reminiscent of Dollar Express. At least Fred's gets $25 million to cover its expenses.
pseudo3d
Posts: 3851
Joined: November 12th, 2015, 7:01 pm
Has thanked: 5 times
Been thanked: 77 times
Status: Offline

Re: Walgreens Close To Buying Rite Aid

Post by pseudo3d »

cathandler wrote:
CalItalian wrote:Rite Aid is exiting South Carolina, Utah and Indiana, and will have one or two stores apiece in Mississippi, Georgia, Alabama, Maine, Rhode Island, West Virginia, Kentucky and Nevada. The company is also selling most of its stores in Colorado, Tennessee, Louisiana, Vermont, North Carolina and Massachusetts.
https://www.usatoday.com/story/money/20 ... 438450001/
How will one or two stores in each of those states be viable? This is reminiscent of Dollar Express. At least Fred's gets $25 million to cover its expenses.
Because Dollar Express was literally a chain scrapped together from the divested stores. I think the trademark was even from another chain called Dollar Express acquired in 2000. Haggen was almost the same way.

It's not the same way because Rite Aid is an established name with the same markets and the same team.
wnetmacman
Forum Moderator
Forum Moderator
Posts: 994
Joined: January 17th, 2010, 2:36 pm
Has thanked: 2 times
Been thanked: 44 times
Status: Offline

Re: Walgreens Close To Buying Rite Aid

Post by wnetmacman »

cathandler wrote:How will one or two stores in each of those states be viable? This is reminiscent of Dollar Express. At least Fred's gets $25 million to cover its expenses.
I seem to remember reading somewhere that Fred's gets nothing if the deal doesn't go through.
cathandler
Front-End Supervisor
Front-End Supervisor
Posts: 162
Joined: September 20th, 2016, 7:28 pm
Has thanked: 1 time
Been thanked: 9 times
Status: Offline

Re: Walgreens Close To Buying Rite Aid

Post by cathandler »

pseudo3d wrote:Dollar Express was literally a chain scrapped together from the divested stores. I think the trademark was even from another chain called Dollar Express acquired in 2000. Haggen was almost the same way.

It's not the same way because Rite Aid is an established name with the same markets and the same team.
My point is that without a substantial store base the business model for maintaining presences in those states becomes marginal at best.
Last edited by cathandler on June 29th, 2017, 1:56 pm, edited 1 time in total.
cathandler
Front-End Supervisor
Front-End Supervisor
Posts: 162
Joined: September 20th, 2016, 7:28 pm
Has thanked: 1 time
Been thanked: 9 times
Status: Offline

Re: Walgreens Close To Buying Rite Aid

Post by cathandler »

wnetmacman wrote:I seem to remember reading somewhere that Fred's gets nothing if the deal doesn't go through.
"Fred’s Pharmacy will receive $25 million as reimbursement for expenses associated with the terminated transaction."
http://www.businesswire.com/news/home/20170629005578/en
Super S
Posts: 2690
Joined: April 1st, 2009, 9:27 pm
Has thanked: 11 times
Been thanked: 61 times
Status: Offline

Re: Walgreens Close To Buying Rite Aid

Post by Super S »

storewanderer wrote:The only thing happening out west is selling 5 stores in Idaho, selling all stores in Utah (this is not a big loss), and selling most stores in Colorado.

Nothing is being sold in CA, OR, or WA.

This is not too radically different from the RAD of 1998. Back then it was 4,000 stores and 1,000 of those were out west.

Now it will be about 2,200 stores and 800 of those will be out west.

The stores out west were always far higher volume than the others so to me this leaves them with a smaller chain that will have better metrics.

Plus if they use the $5 billion they are getting fron WAG to pay down debt, it will greatly improve their financial situation going forward assuming the stores retained are solidly profitable, which I believe they are.
Where in Idaho? I didn't see that in any of the articles. I know they have struggled in the eastern part of the state. They seem to be doing just fine in Boise though.
Post Reply