Albertsons/Rite Aid Merger is off: What's next

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Albertsons/Rite Aid Merger is off: What's next

Post by reymann » August 11th, 2018, 10:57 am

rite aid's next course of action may be to find another private equity firm to help sell off some of the real estate in the poorer performing regions and focus on the core regions. maybe sell off the underperforming rite aid stores in the pacific northwest to cvs.

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Albertsons/Rite Aid Merger is off: What's next

Post by storewanderer » August 11th, 2018, 4:40 pm

reymann wrote:
August 11th, 2018, 10:57 am
rite aid's next course of action may be to find another private equity firm to help sell off some of the real estate in the poorer performing regions and focus on the core regions. maybe sell off the underperforming rite aid stores in the pacific northwest to cvs.
Rite Aid owns little real estate. I think they own some distribution centers and maybe 200 or 300 stores. Much of the real estate was sold off in the late 90's and early 00's under Bob Miller to keep the company afloat.

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Re: Albertsons/Rite Aid Merger is off: What's next

Post by submariner » August 11th, 2018, 7:19 pm

Hello all,

I've split this off to a new topic now that the merger is called off.

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Re: Albertsons/Rite Aid Merger is off: What's next

Post by Brian Lutz » September 27th, 2018, 11:39 am

https://komonews.com/news/business/boar ... r-attempts

There's a major shakeup in Rite Aid's board of directors today, with three members being replaced and the CEO no longer being chairman of the board.

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Re: Albertsons/Rite Aid Merger is off: What's next

Post by pseudo3d » September 27th, 2018, 3:38 pm

Brian Lutz wrote:
September 27th, 2018, 11:39 am
https://komonews.com/news/business/boar ... r-attempts

There's a major shakeup in Rite Aid's board of directors today, with three members being replaced and the CEO no longer being chairman of the board.
Those must have been some angry meetings. While Albertsons will probably live on, Rite Aid's future is probably more in question.

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Re: Albertsons/Rite Aid Merger is off: What's next

Post by storewanderer » September 27th, 2018, 10:05 pm

pseudo3d wrote:
September 27th, 2018, 3:38 pm
Brian Lutz wrote:
September 27th, 2018, 11:39 am
https://komonews.com/news/business/boar ... r-attempts

There's a major shakeup in Rite Aid's board of directors today, with three members being replaced and the CEO no longer being chairman of the board.
Those must have been some angry meetings. While Albertsons will probably live on, Rite Aid's future is probably more in question.
Rite Aid's financials are much stronger than those of Albertsons as far as operating performance goes... Rite Aid can turn a (slight) profit in its current form.

Albertsons cannot turn a profit in its current form due to the heavy debt load. And interest rate increases will be a major problem for them in a few years as they attempt to restructure debt. I would argue however that Albertsons has a lot more hard assets (real estate, manufacturing, etc.) than Rite Aid has. But we don't know how much of that has been sold by Cerberus the past few years to raise cash... we know dozens of previously owned stores have been sold as sale-leaseback, and at least a couple duplicate distribution centers closed.

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Re: Albertsons/Rite Aid Merger is off: What's next

Post by Super S » September 28th, 2018, 9:00 am

storewanderer wrote:
September 27th, 2018, 10:05 pm


Rite Aid's financials are much stronger than those of Albertsons as far as operating performance goes... Rite Aid can turn a (slight) profit in its current form.

Albertsons cannot turn a profit in its current form due to the heavy debt load. And interest rate increases will be a major problem for them in a few years as they attempt to restructure debt. I would argue however that Albertsons has a lot more hard assets (real estate, manufacturing, etc.) than Rite Aid has. But we don't know how much of that has been sold by Cerberus the past few years to raise cash... we know dozens of previously owned stores have been sold as sale-leaseback, and at least a couple duplicate distribution centers closed.
Rite Aid has improved their store experience considerably. In addition to the remodels, they have a decent variety. They have also "right sized" many of the older former PayLess stores that at one point had large areas blocked off by shelving and the stores look better now. As a company, they got too big. And they neglected a lot of their acquired stores for a long time. Now they are at least trying to focus on improving the store experience.

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Re: Albertsons/Rite Aid Merger is off: What's next

Post by pseudo3d » October 16th, 2018, 9:17 am

storewanderer wrote:
September 27th, 2018, 10:05 pm
pseudo3d wrote:
September 27th, 2018, 3:38 pm
Brian Lutz wrote:
September 27th, 2018, 11:39 am
https://komonews.com/news/business/boar ... r-attempts

There's a major shakeup in Rite Aid's board of directors today, with three members being replaced and the CEO no longer being chairman of the board.
Those must have been some angry meetings. While Albertsons will probably live on, Rite Aid's future is probably more in question.
Rite Aid's financials are much stronger than those of Albertsons as far as operating performance goes... Rite Aid can turn a (slight) profit in its current form.

Albertsons cannot turn a profit in its current form due to the heavy debt load. And interest rate increases will be a major problem for them in a few years as they attempt to restructure debt. I would argue however that Albertsons has a lot more hard assets (real estate, manufacturing, etc.) than Rite Aid has. But we don't know how much of that has been sold by Cerberus the past few years to raise cash... we know dozens of previously owned stores have been sold as sale-leaseback, and at least a couple duplicate distribution centers closed.
https://www.supermarketnews.com/retail- ... nd-quarter

The losses are narrowing, though, but it looks like a huge chunk of that is from selling and leasing back two distribution centers. The EBITDA and same store sales increased, though.

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Re: Albertsons/Rite Aid Merger is off: What's next

Post by storewanderer » October 16th, 2018, 1:07 pm

pseudo3d wrote:
October 16th, 2018, 9:17 am
storewanderer wrote:
September 27th, 2018, 10:05 pm
pseudo3d wrote:
September 27th, 2018, 3:38 pm

Those must have been some angry meetings. While Albertsons will probably live on, Rite Aid's future is probably more in question.
Rite Aid's financials are much stronger than those of Albertsons as far as operating performance goes... Rite Aid can turn a (slight) profit in its current form.

Albertsons cannot turn a profit in its current form due to the heavy debt load. And interest rate increases will be a major problem for them in a few years as they attempt to restructure debt. I would argue however that Albertsons has a lot more hard assets (real estate, manufacturing, etc.) than Rite Aid has. But we don't know how much of that has been sold by Cerberus the past few years to raise cash... we know dozens of previously owned stores have been sold as sale-leaseback, and at least a couple duplicate distribution centers closed.
https://www.supermarketnews.com/retail- ... nd-quarter

The losses are narrowing, though, but it looks like a huge chunk of that is from selling and leasing back two distribution centers. The EBITDA and same store sales increased, though.
$290 million in gains from the distribution center sale and leaseback transaction and you add that back and they're back at a $300+ million loss again. It appears as if they are selling off assets to fund operations.

With interest rates slated to rise again later this year and their debt, I don't see what will happen unless interest rates fall again as more of their debt comes due.

The same store sales numbers are not as good as Kroger either. Their pricing is terrible and in NorCal their prices are up across the board from a year ago while prices at Raleys have been stable and prices have fallen at Save Mart. Though I'm not sure how much of the Kroger increases come from more tonnage and how much come from price increases...

They really need to sell off some things to pay down debt.

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Re: Albertsons/Rite Aid Merger is off: What's next

Post by storewanderer » October 16th, 2018, 1:09 pm

storewanderer wrote:
October 16th, 2018, 1:07 pm
pseudo3d wrote:
October 16th, 2018, 9:17 am
storewanderer wrote:
September 27th, 2018, 10:05 pm


Rite Aid's financials are much stronger than those of Albertsons as far as operating performance goes... Rite Aid can turn a (slight) profit in its current form.

Albertsons cannot turn a profit in its current form due to the heavy debt load. And interest rate increases will be a major problem for them in a few years as they attempt to restructure debt. I would argue however that Albertsons has a lot more hard assets (real estate, manufacturing, etc.) than Rite Aid has. But we don't know how much of that has been sold by Cerberus the past few years to raise cash... we know dozens of previously owned stores have been sold as sale-leaseback, and at least a couple duplicate distribution centers closed.
https://www.supermarketnews.com/retail- ... nd-quarter

The losses are narrowing, though, but it looks like a huge chunk of that is from selling and leasing back two distribution centers. The EBITDA and same store sales increased, though.
$290 million in gains from the distribution center sale and leaseback transaction and you add that back and they're back at a $300+ million loss again. It appears as if they are selling off assets to fund operations.

With interest rates slated to rise again later this year and their debt, I don't see what will happen unless interest rates fall again as more of their debt comes due.

The same store sales numbers are not as good as Kroger either. Their pricing is terrible and in NorCal their prices are up across the board from a year ago while prices at Raleys have been stable and prices have fallen at Save Mart. Safeway NorCal takes prices to levels never seen before like 89cent bagels and donuts, 8.99 per pound deli chicken tenders or wings, 12.99 per pound Boars Head turkey and ham, 1.00 8oz cans of name brand tomato sauce. Simply absurd pricing. Though I'm not sure how much of the Kroger increases come from more tonnage and how much come from price increases...

They really need to sell off some things to pay down debt.

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