Rite Aid closing at least 63 stores

[storewanderer]

They say they will be able to make the severance payments on Wednesday. No further explanation for how this was handled.

If that's the best they can do that's the best they can do I guess. Now we can wait for Wednesday to see if it happens.

To say trust was broken by this is an understatement.

[ClownLoach]

They say they will be able to make the severance payments on Wednesday. No further explanation for how this was handled.

If that's the best they can do that's the best they can do I guess. Now we can wait for Wednesday to see if it happens.

To say trust was broken by this is an understatement.

That sounds like they are hanging on by a thread. Literally waiting for a few days of sales to refill the coffers enough to pay these folks impacted by the poor decisions of past (and present?) leadership. I'm sure the CEO paycheck wasn't delayed.

[storewanderer]

They say they will be able to make the severance payments on Wednesday. No further explanation for how this was handled.

If that's the best they can do that's the best they can do I guess. Now we can wait for Wednesday to see if it happens.

To say trust was broken by this is an understatement.

That sounds like they are hanging on by a thread. Literally waiting for a few days of sales to refill the coffers enough to pay these folks impacted by the poor decisions of past (and present?) leadership. I'm sure the CEO paycheck wasn't delayed.

My opinion is they need to be paid now, not Wednesday.

This does not seem like a good situation.

I also expect this will be investigated by whatever states are involved even if they pay it Wednesday.

[ClownLoach]

They say they will be able to make the severance payments on Wednesday. No further explanation for how this was handled.

If that's the best they can do that's the best they can do I guess. Now we can wait for Wednesday to see if it happens.

To say trust was broken by this is an understatement.

That sounds like they are hanging on by a thread. Literally waiting for a few days of sales to refill the coffers enough to pay these folks impacted by the poor decisions of past (and present?) leadership. I'm sure the CEO paycheck wasn't delayed.

My opinion is they need to be paid now, not Wednesday.

This does not seem like a good situation.

I also expect this will be investigated by whatever states are involved even if they pay it Wednesday.

Unfortunately as long as it was rubber stamped by the bankruptcy court, which it obviously was since they can't do anything like this without their approval, then the states have zero recourse. When they file they have to ask for permission to do usual and customary practices which even includes asking permission to pay employee payroll. A severance package is not usual and customary payroll. It could also be that someone screwed up and failed to ask the court for permission to issue these checks so they had to be canceled.

One of the fine print lines in direct deposit agreements consents to withdrawal or reversal if paid "in error." This is a problem for sure, but remember if you get paper paychecks and your company goes bankrupt any check that was issued and not deposited/cleared the bank before the filing becomes a secured claim and won't be paid until the end of the bankruptcy which can be months or years... If it ever gets paid at all. So I'd rather take my chances with the direct deposit versus potentially worthless paper checks after having to console horribly upset employees when my company filed chapter 11 and having no power whatsoever to help them when they desperately needed the money that was on those checks. I guess if you didn't trust your company then you theoretically could do direct deposit then go to the bank at opening every payday and withdraw your entire check in cash and deposit the cash elsewhere.

Unfortunately trust is one of the first things that gets broken when your employer files chapter 11. And as this continues to wind along as we see the actions taken we will learn how trustworthy the Rite Aid leadership is, or isn't. Unfortunately there are many discussions happening daily in all bankruptcies of this size and they are not open door sessions nor will they be put on paper to be read publicly until they are signed by the judge. This is how we have suspicious activities like the sign walker ads that don't align with other known filings like contracting liquidation firms for future closures, and actions that don't align with either like store closures that appear to happen with no liquidation event (Temecula just plain disappeared for example, I never saw any closing sale).

What was shared publicly at the beginning sounded very good, but we seem to be seeing signs of deterioration that usually stem from sales underperforming even the most gloomy forecasts, expenses exceeding expectations usually caused by legal fees and consultants, and vendors withholding product because they fear they won't get paid so they refuse to ship until the company exits Chapter 11. The sales, expenses, and vendors become a vicious circle and lead to the death of the company. I really didn't think that would be happening here but there are so many red flags I cannot help but become very concerned.

[storewanderer]

I read the CEO is getting $60,000 a week.

From what I am seeing the people impacted by this were laid off corporate employees, district managers (pharmacy, HR, operations, loss prevention- these aren't Rite Aid's titles but these are the positions), and salaried store management who just so happened to be laid off at the same time. This didn't impact hourly/unionized employees.

I wonder if there is some distinction on not paying out to salaried employees vs. hourly.

They had some late payrolls to employees back before filing bankruptcy. Like a day late, or came at night instead of in the morning as it typically did, stuff like that. But I find this different since it deposited and reversed.

I wonder if you do a direct deposit when your account does not have sufficient funds if it posts then reverses like this?

My suspicion is their sales numbers are terrible because their inventory situation is problematic, they've screwed up in-store pricing, and nothing is being done to try and get more foot traffic in. I also think it is a "light" flu season. There is also the issue of people not getting as many prescriptions due to money being tight right now which I think is another problem. In general pharmacies and drug stores do not seem as busy this winter as they usually are.

[Romr123]

Drove past Desert Hot Springs CA in late morning---at least 5 cars lined up at drive thru (I would guess this store does a big drive-thru business).

[storewanderer]

Drove past Desert Hot Springs CA in late morning---at least 5 cars lined up at drive thru (I would guess this store does a big drive-thru business).

How many minutes per car was it taking them?

I've seen 6-7 cars lined up at CVS/Walgreens units that are not overly busy... they're lined up because the place is inefficient and the line moves 1 car every 10-15 minutes.

CVS is frequently closing drive through entirely in my area due to lack of staffing. In addition to closing pharmacy very early, some stores as early as 5 PM all week. Just like Rite Aid in many locations before it closed.

[ClownLoach]

Drove past Desert Hot Springs CA in late morning---at least 5 cars lined up at drive thru (I would guess this store does a big drive-thru business).

How many minutes per car was it taking them?

I've seen 6-7 cars lined up at CVS/Walgreens units that are not overly busy... they're lined up because the place is inefficient and the line moves 1 car every 10-15 minutes.

CVS is frequently closing drive through entirely in my area due to lack of staffing. In addition to closing pharmacy very early, some stores as early as 5 PM all week. Just like Rite Aid in many locations before it closed.

Rite Aid in Wildomar is still backing up with many cars in the drive thru. Clearly there is a contingent of customers who do not want to move their prescriptions to CVS. Too many people I know have had bad experiences with both. My cousin noticed a mismatched pill in her prescription once which could have made her seriously ill. Both unfortunately make the pharmacists work too quickly so they make mistakes. If I had an experience like that I would never return to that chain either. Hopefully Rite Aid is able to pull through. Interestingly enough, I am seeing news articles only now being published about the last wave of SoCal closures with store lists of locations that were emptied out several weeks ago and none of the stories seem to indicate that any future closures are on the way. If there is an imminent threat of liquidation the news hasn't picked it up yet.

[reymann]

I see a lot of drive through pharmacy traffic at the Rite Aids on Fresno/C St & Blackstone/Olive since the CVS in downtown Fresno closed and liquidation would create a big pharmacy desert in that area as the next closest drug stores would be the Walgreen's on Blackstone/Clinton & Cedar/Olive. They also have a lot more prescriptions since CVS doesn't nearly have as good of a reputation as Longs did in Fresno.

[Romr123]

I wonder if there might truly have just been a bookkeeping/accounting error (pulling the severance funds out of the payroll account or something odd like that).

In the times I've gotten severance pay, it seems like though it's been run through the payroll system the accounting is quite different (fixed amounts deducted for taxes, no 401k, no deductions for charitable donation, etc etc). If the "guru" of doing non-payroll checks (things like wage garnishments, etc) was caught up in the layoff, if you squint you could see where it might take a day or to sort things out.

Given that there haven't been many "sky is falling" news stories (other than seemingly in metro Harrisburg where likely there was a concentration of folks getting severance), cross fingers that it was a non-event.