Rite Aid closing at least 63 stores

[storewanderer]

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...

Lake Elsinore on the closure list today too.

This is what I have been predicting ever since they made the miserable exit from the Tahoe area. Still there are a few closures that went even where they have no CVS/Walgreens like Bishop, CA and Hines, OR among a few others so that is a little weird but maybe the numbers were so bad that the stores were not possible to sell off.

The thing at this point is you have the typical bankruptcy process where different parties want different outcomes. Some creditor groups may want an outcome where part of the company is sold off to CVS/Walgreens and keep the rest operating, others may want total liquidation, management obviously and I hope the unions want to see the profitable pieces as a going concern.

[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...

Lake Elsinore on the closure list today too.

This is what I have been predicting ever since they made the miserable exit from the Tahoe area. Still there are a few closures that went even where they have no CVS/Walgreens like Bishop, CA and Hines, OR among a few others so that is a little weird but maybe the numbers were so bad that the stores were not possible to sell off.

The thing at this point is you have the typical bankruptcy process where different parties want different outcomes. Some creditor groups may want an outcome where part of the company is sold off to CVS/Walgreens and keep the rest operating, others may want total liquidation, management obviously and I hope the unions want to see the profitable pieces as a going concern.

Well remember that the landlords steered the ship here as Rite Aid clearly is not profitable in many locations at the rents they had previously agreed to. That drove most of the closures. But if a secret plan emerged later to possibly sell out regions or divisions then some of these closures scattered here and there would paint such a picture. Since they left this entire area except Wildomar, I see no point in not closing that store too. Unless say Walgreens is interested in acquiring it. No reason to drive a truck there for deliveries, have field management visit it, etc. as they've created a rural island store in what is a massive growing suburb.

It's all an odd mystery that will reveal itself soon I'm sure. There has been no public indication from filings anywhere that there was anything less than total alignment and agreement with every major creditor except McKesson, enabling a prepackaged bankruptcy with a predetermined outcome. The thousands of other people who are complaining, demanding payments etc. like landlords and other people who had random lawsuits prior to bankruptcy always have the right to be heard in the court but their word does not carry any weight on the outcome of the bankruptcy. Therefore it would be a major surprise if the plan has changed in any way from the original packaged deal to sell all the retail elements and intellectual property that are not closed during restructuring to the creditors who have created a receiving holding company called "Rite Aid Retail 2.0". We may be reading too much into analyzing the maps. Again at this point in time any closure is occurring because the company could not work out an agreement with the landlord, period.

[reymann]

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...

Lake Elsinore on the closure list today too.

This is what I have been predicting ever since they made the miserable exit from the Tahoe area. Still there are a few closures that went even where they have no CVS/Walgreens like Bishop, CA and Hines, OR among a few others so that is a little weird but maybe the numbers were so bad that the stores were not possible to sell off.

The thing at this point is you have the typical bankruptcy process where different parties want different outcomes. Some creditor groups may want an outcome where part of the company is sold off to CVS/Walgreens and keep the rest operating, others may want total liquidation, management obviously and I hope the unions want to see the profitable pieces as a going concern.

Well remember that the landlords steered the ship here as Rite Aid clearly is not profitable in many locations at the rents they had previously agreed to. That drove most of the closures. But if a secret plan emerged later to possibly sell out regions or divisions then some of these closures scattered here and there would paint such a picture. Since they left this entire area except Wildomar, I see no point in not closing that store too. Unless say Walgreens is interested in acquiring it. No reason to drive a truck there for deliveries, have field management visit it, etc. as they've created a rural island store in what is a massive growing suburb.

It's all an odd mystery that will reveal itself soon I'm sure. There has been no public indication from filings anywhere that there was anything less than total alignment and agreement with every major creditor except McKesson, enabling a prepackaged bankruptcy with a predetermined outcome. The thousands of other people who are complaining, demanding payments etc. like landlords and other people who had random lawsuits prior to bankruptcy always have the right to be heard in the court but their word does not carry any weight on the outcome of the bankruptcy. Therefore it would be a major surprise if the plan has changed in any way from the original packaged deal to sell all the retail elements and intellectual property that are not closed during restructuring to the creditors who have created a receiving holding company called "Rite Aid Retail 2.0". We may be reading too much into analyzing the maps. Again at this point in time any closure is occurring because the company could not work out an agreement with the landlord, period.

If they start divesting to Walgreens & CVS, it will likely be done piecemeal. I think NorCal and Oregon would be the first two regions divested off and Oregon can be divested to CVS with no issues since there would be no overlap. NorCal is where it gets interesting, especially the bay area. They would have to minimalize overlap.

[storewanderer]

This Lincoln Blvd.-Los Angeles closure is being handled differently from previous closures. Previous closures followed a model of keeping pharmacy open until the last day of store operations and in many cases not even disclosing who the buyer of prescriptions was until after the store closed...

https://yovenice.com/2024/04/02/rite-ai ... ing-weeks/

From the article:
"The store, located at 888 Lincoln Blvd. in between Rose Avenue and The Venice West theater, will close in approximately three weeks, according to a staff member. An exact date was not provided. Its pharmacy, meanwhile, will close in one week as prescriptions on the shelves are available for pickup. New orders will be redirected to a nearby CVS location."

So this is interesting. The store will close in THREE weeks, this sounds like the liquidators aren't involved... and it is the typical Rite Aid closing sale/process of 50-75% off certain categories/pack up the rest...

But the pharmacy part is more interesting. The pharmacy stops accepting new prescriptions IMMEDIATELY and stays open only to sell refills "on the shelves available for pickup"... and refers anyone with new orders immediately to CVS...?

Based on inventory levels I am seeing being worse than they've ever been, and this odd IMMEDIATE pharmacy transition to CVS, I think they are in a cash crunch. They are selling off some of their high performing stores pharmacies to CVS to get IMMEDIATE cash. They can't keep operating pharmacy for a few weeks to close it with the rest of the store, they need immediate cash NOW for these prescription files...

I know the article says the closure is due to lease issues...

[ClownLoach]

Lake Elsinore on the closure list today too.

This is what I have been predicting ever since they made the miserable exit from the Tahoe area. Still there are a few closures that went even where they have no CVS/Walgreens like Bishop, CA and Hines, OR among a few others so that is a little weird but maybe the numbers were so bad that the stores were not possible to sell off.

The thing at this point is you have the typical bankruptcy process where different parties want different outcomes. Some creditor groups may want an outcome where part of the company is sold off to CVS/Walgreens and keep the rest operating, others may want total liquidation, management obviously and I hope the unions want to see the profitable pieces as a going concern.

Well remember that the landlords steered the ship here as Rite Aid clearly is not profitable in many locations at the rents they had previously agreed to. That drove most of the closures. But if a secret plan emerged later to possibly sell out regions or divisions then some of these closures scattered here and there would paint such a picture. Since they left this entire area except Wildomar, I see no point in not closing that store too. Unless say Walgreens is interested in acquiring it. No reason to drive a truck there for deliveries, have field management visit it, etc. as they've created a rural island store in what is a massive growing suburb.

It's all an odd mystery that will reveal itself soon I'm sure. There has been no public indication from filings anywhere that there was anything less than total alignment and agreement with every major creditor except McKesson, enabling a prepackaged bankruptcy with a predetermined outcome. The thousands of other people who are complaining, demanding payments etc. like landlords and other people who had random lawsuits prior to bankruptcy always have the right to be heard in the court but their word does not carry any weight on the outcome of the bankruptcy. Therefore it would be a major surprise if the plan has changed in any way from the original packaged deal to sell all the retail elements and intellectual property that are not closed during restructuring to the creditors who have created a receiving holding company called "Rite Aid Retail 2.0". We may be reading too much into analyzing the maps. Again at this point in time any closure is occurring because the company could not work out an agreement with the landlord, period.

If they start divesting to Walgreens & CVS, it will likely be done piecemeal. I think NorCal and Oregon would be the first two regions divested off and Oregon can be divested to CVS with no issues since there would be no overlap. NorCal is where it gets interesting, especially the bay area. They would have to minimalize overlap.

No, it would have to happen all at once. The key to bankruptcy is that you can escape all your lease obligations at no charge. It can cost millions of dollars to cancel a lease unless in bankruptcy, if the lease even allows for it.

So they would need to make a deal to break up the company NOW and sell segments to companies like CVS or Walgreens.

Then any Rite Aid store they would need to close as an overlap gets kicked back to the bankruptcy trustee (Judge) to have the lease canceled for free.

The cost to acquire stores "piecemeal" would be too high, with lease termination fees for unwanted locations in the millions potentially as stated.

Furthermore, and this is a biggie, the bankruptcy court is something of a end run around antitrust laws. Remember that Walgreens already tried to buy all of Rite Aid but couldn't due to antitrust laws. If the sale is ordered in a bankruptcy court, then it is almost "above the law" and considered "ordered to be sold to Party X by the Federal Courts". Mergers and acquisitions that could never otherwise happen are okay if they happen in bankruptcy.

So it would be one huge deal, one big list of stores selling, kept, and/or closed all at once.

[mburb1981]

Another batch of closures dropped yesterday, and it's a smaller one this time: three New York stores (the only store in Tonawanda [former Eckerd], Halsey Street and Broadway in Brooklyn [and it's adjacent to a station for the subway's J line], and one of four stores in Lockport [the closing one is also a former Eckerd]); the only store in York, Pennsylvania proper (this one still has a pre-RA1 stripe decor!); one of two stores in Pennsauken Township, New Jersey (the closing one is yet another former Eckerd); and one of three stores in Warren, Ohio.

[ClownLoach]

This Lincoln Blvd.-Los Angeles closure is being handled differently from previous closures. Previous closures followed a model of keeping pharmacy open until the last day of store operations and in many cases not even disclosing who the buyer of prescriptions was until after the store closed...

https://yovenice.com/2024/04/02/rite-ai ... ing-weeks/

From the article:
"The store, located at 888 Lincoln Blvd. in between Rose Avenue and The Venice West theater, will close in approximately three weeks, according to a staff member. An exact date was not provided. Its pharmacy, meanwhile, will close in one week as prescriptions on the shelves are available for pickup. New orders will be redirected to a nearby CVS location."

So this is interesting. The store will close in THREE weeks, this sounds like the liquidators aren't involved... and it is the typical Rite Aid closing sale/process of 50-75% off certain categories/pack up the rest...

But the pharmacy part is more interesting. The pharmacy stops accepting new prescriptions IMMEDIATELY and stays open only to sell refills "on the shelves available for pickup"... and refers anyone with new orders immediately to CVS...?

Based on inventory levels I am seeing being worse than they've ever been, and this odd IMMEDIATE pharmacy transition to CVS, I think they are in a cash crunch. They are selling off some of their high performing stores pharmacies to CVS to get IMMEDIATE cash. They can't keep operating pharmacy for a few weeks to close it with the rest of the store, they need immediate cash NOW for these prescription files...

I know the article says the closure is due to lease issues...

But would they get immediate cash now? CVS is famous for acting like Walmart and having long payment terms. They probably demanded 180 days to pay for it.

[reymann]

What I worry about with Rite Aid potentially divesting all their west coast stores to CVS and Walgreens is a possible pharmacy desert in the poorest part of Fresno. I hope CVS takes the Abby/Olive store and one of the two takes the one on B St. With CVS and Walgreens also doing not so hot gives independent pharmacies an opportunity regain customers.

[ClownLoach]

What I worry about with Rite Aid potentially divesting all their west coast stores to CVS and Walgreens is a possible pharmacy desert in the poorest part of Fresno. I hope CVS takes the Abby/Olive store and one of the two takes the one on B St. With CVS and Walgreens also doing not so hot gives independent pharmacies an opportunity regain customers.

CVS not doing well? Their earnings per share were over $6 last year and they've beat Wall Street 4 quarters in a row. Their earnings per share are 300% higher than freaking WALMART. They're forecasting earnings UP another TWO DOLLARS A SHARE this year. Walmart only makes two dollars a share period! They've got profit flying out of every orifice. They literally cannot make money fast enough to be satisfied due to their outrageous greed. I wish I was doing as badly as CVS.

[BillyGr]

CVS not doing well? Their earnings per share were over $6 last year and they've beat Wall Street 4 quarters in a row. Their earnings per share are 300% higher than freaking WALMART. They're forecasting earnings UP another TWO DOLLARS A SHARE this year. Walmart only makes two dollars a share period! They've got profit flying out of every orifice. They literally cannot make money fast enough to be satisfied due to their outrageous greed. I wish I was doing as badly as CVS.

They certainly sound like they are doing just fine, though looking it seems that Walmart has about 7x as many shares (8billion+) as CVS (1.2 billion), so Walmart earning $2/share may actually be better than CVS earning $8/share once you figure out what that total earnings comes out to