Retail Watchers

Surprised they didn't mention ABS as a suitor seeing as how they're about to gain a significant holding in northwest Indiana (unless rumors of them being the mystery S&VT buyers are completely false that is). Then again, the newspaper does mention how stiff competition is, with Meijer and Kroger muscling in, and some of those locations are pretty small.

They've closed nearly half their stores since the buyout. They stopped investing in the stores back when the family still controlled the chain. Their market area isn't growing and includes some places hard hit by plant closings. Why would anyone want this chain?

buckguy wrote:They've closed nearly half their stores since the buyout. They stopped investing in the stores back when the family still controlled the chain. Their market area isn't growing and includes some places hard hit by plant closings. Why would anyone want this chain?

Nobody's going to want the chain whole, and even some of the supposedly-viable stores look pretty small (like 30k-40k square feet). Probably right, considering better options available.

All 37 in-store pharmacies are to close; prescription records have been sold to CVS. The locations with in-store pharmacies will no longer be able to sell hard liquor in accordance with Indiana law. Krispy Kreme joins the long list of unpaid creditors.
https://www.ibj.com/articles/63619-mars ... pharmacies

cathandler wrote:All 37 in-store pharmacies are to close; prescription records have been sold to CVS. The locations with in-store pharmacies will no longer be able to sell hard liquor in accordance with Indiana law. Krispy Kreme joins the long list of unpaid creditors.
https://www.ibj.com/articles/63619-mars ... pharmacies

Probably the worst mistake they can make at this point, that's further devalued the stores and made them less attractive to potential bidders. Even A&P didn't stoop to "closing all pharmacies".

pseudo3d wrote:

cathandler wrote:All 37 in-store pharmacies are to close; prescription records have been sold to CVS. The locations with in-store pharmacies will no longer be able to sell hard liquor in accordance with Indiana law. Krispy Kreme joins the long list of unpaid creditors.
https://www.ibj.com/articles/63619-mars ... pharmacies

Probably the worst mistake they can make at this point, that's further devalued the stores and made them less attractive to potential bidders. Even A&P didn't stoop to "closing all pharmacies".

Either that, or they can't find a bidder, and they're going ahead and closing them before they would have to anyway. Usually pharmacies sell off the prescriptions in a shutdown.

wnetmacman wrote:

pseudo3d wrote:

cathandler wrote:All 37 in-store pharmacies are to close; prescription records have been sold to CVS. The locations with in-store pharmacies will no longer be able to sell hard liquor in accordance with Indiana law. Krispy Kreme joins the long list of unpaid creditors.
https://www.ibj.com/articles/63619-mars ... pharmacies

Probably the worst mistake they can make at this point, that's further devalued the stores and made them less attractive to potential bidders. Even A&P didn't stoop to "closing all pharmacies".

Either that, or they can't find a bidder, and they're going ahead and closing them before they would have to anyway. Usually pharmacies sell off the prescriptions in a shutdown.

If they can't find a bidder for any of the stores, even the better ones (did they even announce trying to find someone to sell to? I've heard the whole "Giant Eagle may be interested" line but I don't recall them looking for a buyer) then there's no use biding their time, and should just declare bankruptcy, pharmacies closing to pay back creditors, and host massive going out of business sales. But if total liquidation isn't a month away, what's their end game? Selling the remaining stores to SuperValu to run as a self-supplied junker chain? I'm sure fellow IN retailer Central Co-Op's financials weren't looking very bright either, but at least they had a number of attractive stores and kept them together before selling them.

Pharmacy used to be a reliably profitable special department for grocery stores but the environment has really changed in the past 4-5 years as insurers have consolidated and reimbursements have been harder and harder to make a profit on due to being so low. This really depends on the individual retailer and what region they operate in/what insurer is dominant at their stores. This is why pharmacy profitability is pretty uneven depending on the individual chain and individual market.

CVS has also shifted a lot of business to its stores through its ownership of Caremark PBM.

It is interesting Marsh is selling pharmacies separate from selling the stores. I would think store+pharmacy would be a more attractive sale package than store alone. I do not know the terms of these pharmacy closures and related sales to CVS, but if the closure also has a non compete clause then it makes it even worse...

cathandler wrote:The locations with in-store pharmacies will no longer be able to sell hard liquor in accordance with Indiana law.

I come from a state with odd alcohol laws, but is just pretty funny

mbz321 wrote:

cathandler wrote:The locations with in-store pharmacies will no longer be able to sell hard liquor in accordance with Indiana law.

I come from a state with odd alcohol laws, but is just pretty funny

The Indy Star had a story about that aspect of the pharmacy shutdown:
http://www.indystar.com/story/money/201 ... 101165236/