Rite Aid closing at least 63 stores

[ClownLoach]

It looks like they've reached a bankruptcy settlement. Hopefully they exit rapidly.

We should hear confirmation of this today or tomorrow. Interesting that the news reports specifically of settlements with both the DOJ and McKesson. My only concern is if that means they are going to have to cash out some assets to pay those settlements.

with some of the distribution issues about to hit norcal and oregon, i wonder if those regions end up being divested off as part of the settlement to generate cash.

They don't have an option to divest anything. But unfortunately they do have the opportunity to liquidate wherever they want to.

[storewanderer]

The restructuring plan calls for them to continue to operate 1,600 stores and 5 distribution centers.

So if the plan wins approval the store closures are almost over but not quite over yet.

That they have a plan is good news, this is a lot further than some other retailers got. It will be interesting to see the management team of the emerged company. For instance will the CFO stay?

[BillyGr]

The restructuring plan calls for them to continue to operate 1,600 stores and 5 distribution centers.

So if the plan wins approval the store closures are almost over but not quite over yet.

That they have a plan is good news, this is a lot further than some other retailers got. It will be interesting to see the management team of the emerged company. For instance will the CFO stay?

Their site now lists 1,692 - but one has to wonder if that 1,600 number is actually a fixed or estimated number (given that there isn't a huge difference between it and the current total).

Then again, they may have a few more they want to remove - looking at the state by state, there are a few places with fairly small numbers of stores, but I don't know enough to know if they are just really good areas, or may actually be in one state but close to another with more stores or what.

[storewanderer]

The restructuring plan calls for them to continue to operate 1,600 stores and 5 distribution centers.

So if the plan wins approval the store closures are almost over but not quite over yet.

That they have a plan is good news, this is a lot further than some other retailers got. It will be interesting to see the management team of the emerged company. For instance will the CFO stay?

Their site now lists 1,692 - but one has to wonder if that 1,600 number is actually a fixed or estimated number (given that there isn't a huge difference between it and the current total).

Then again, they may have a few more they want to remove - looking at the state by state, there are a few places with fairly small numbers of stores, but I don't know enough to know if they are just really good areas, or may actually be in one state but close to another with more stores or what.

There have been more closure announcements recently (this week). Another "store of the future" in VA was announced closing yesterday for example. Very little closure activity throughout March.

I think March was a tough holding period. If they didn't get to a proposal to exit bankruptcy the entire chain would be gone... but they have a proposal. Obviously it will go through comments and arguments and some party will have an opinion that some of us may not like and those parties won the contest at places like Toys R Us, Circuit City, BBB, etc., but we have to hope at the end of the day they get an agreement to emerge that enables them to continue operations successfully.

[mburb1981]

The first sizable store closure list in a while dropped today. Two Michigan stores this time: the last store in Novi (an unremodeled Customer World store at 13 and Novi Road) and one of three stores in Sterling Heights (15 and Dodge Park, also a Customer World-era store, though this one was remodeled, and it's in a strip mall albeit in a separate building).

[storewanderer]

The first sizable store closure list in a while dropped today. Two Michigan stores this time: the last store in Novi (an unremodeled Customer World store at 13 and Novi Road) and one of three stores in Sterling Heights (15 and Dodge Park, also a Customer World-era store, though this one was remodeled, and it's in a strip mall albeit in a separate building).

Another great list. Two more closures around Sacramento. Elk Grove- this WAS a busy store. I don't understand why it is closing. The Nugget next to it is crazy busy and it is well located; Nugget does not have a pharmacy (had a pharmacy when it was Ralphs...). Stockton Blvd. - this one is not a good neighborhood but a very busy intersection and I thought it did okay. It did okay enough that CVS just built a new store across the road so I guess that was enough for Rite Aid to throw up the closing banner.

Also wait for it that brand new store in Winchester is now closing. So that is one "new concept" store closing.

Also the store on this list at 1808 Salem Road in Virginia Beach, VA is a "new concept" store as well. Also closing. Some good photos of this thing on Google Maps. What a weird place. Big open space next to pharmacy with some chairs, the gift card aisle, and seasonal merchandise on displays that look designed for clothing or something.

9 other CA closures... all bad closures. I do not understand these closures.

I am surprised no OR/WA closures. Maybe CVS told them to knock if off with all the closures if they want any chance of selling the stores off to CVS.

[ClownLoach]

The first sizable store closure list in a while dropped today. Two Michigan stores this time: the last store in Novi (an unremodeled Customer World store at 13 and Novi Road) and one of three stores in Sterling Heights (15 and Dodge Park, also a Customer World-era store, though this one was remodeled, and it's in a strip mall albeit in a separate building).

Also wait for it that brand new store in Winchester is now closing. So that is one "new concept" store closing.

Hilarious. The newest store in the company, possibly the last to ever open, is closing.

What makes this even worse is that the store was on a busy North-South roadway, Winchester Rd. (CA-79). The major East-West thoroughfare Clinton Keith Rd. Sat for decades without connecting to Winchester, you had to go make a bunch of funky turns through a residential area to get to Winchester. The new Costco, Super Target, Home Depot under construction etc. is all on Clinton Keith.

They just finished extending Clinton Keith to Winchester Rd., which probably will double the traffic to this site. And now they decide to close it.

One Rite Aid left in the entire Temecula Valley, Wildomar. Unbelievable. Complete exit from one of the few growing areas in SoCal.

At least with Winchester closed, the Idaho stores, that other store - have they finally killed all of these failed next generation stores? Sounds like it to me.

I hate to say it, but the closure pattern here is a perfect match for selling the stores to Walgreens, not CVS, if such a deal is going to pop up and surprise us all.

[storewanderer]

334 South Vermont in Los Angeles closing a 24 hour store in a very busy area.... unbelievable.

Encinitas used to be a 24 hour store too but wasn't the past few years...

[ClownLoach]

Any store closing at this late date is being forced by the landlord, not a Rite Aid decision. That means that they're probably all "good stores" with the exception of that Winchester joke. That was probably at top rent because it was brand new, traffic on the way and a massive half million square foot power center supposedly going in across the street that has been under development for two decades (was going to include the first Whole Foods in the area with a 60K box but unfortunately they dropped out and Sprouts took the spot, still supposedly getting a full size Walmart Supercenter amongst others). Winchester landlord probably had zero interest in giving up a fat rent reduction on a brand new building, resulting in the lease rejection.

That store sat fully built with the signs under tarps for nearly two years. Possibly had the previous logo under the tarps, nobody could tell. It was waiting to open longer than it actually was open. My guess is Rite Aid wanted to try to string it along now that the roadway is finally open while hoping for a rent reduction that never materialized. What a joke. Millions of dollars wasted.

[ClownLoach]

I'm really starting to wonder if they have made a "behind closed doors" deal to cut up the company and sell chunks to Walgreens and CVS. I didn't think they would do this before, and none of the public court filings support this either, but I do really start to wonder. Reviewing some of the most decimated areas, if you were to do a merger with either chain there would be zero overlap integrating the (few) remaining stores. For example Temecula-Murrieta-Wildomar area is wiped out for Rite Aid. The only remaining store in this entire area with population over 250K is Wildomar, the only corner where Walgreens has a gap in their coverage. I've looked at other areas around Orange County and San Diego and could come up with a similar plan where one market goes to CVS, other goes to Walgreens and so on. In every case one chain could buy a large market, a county at a time, no overlaps.

Both companies could easily scrape together the money to buy out Rite Aid's stores at this point, because it's a one time opportunity where they could make an end run around any kind of antitrust laws.

Maybe this was not the original plan, but the way things have shaken out it paved the way to sell off large segments of the business?

I am really wondering if Rite Aid is going to retreat to their original East Coast roots and sell everything in the West to Walgreens and CVS...