Rite Aid Goes Bust...West Coast Stores??

[storewanderer]

It's already all been sold to their creditors. There isn't anything to sell to CVS or Walgreens.

The question being, what prevents those creditors from attempting to make money by selling off stores (be it separately or a bunch in an area) or a brand like Thrifty to others? Seems like the answer is nothing.

They're going to be the owners of the entire Rite Aid enterprise which will basically be a debt free profit engine. Why go through the trouble and expense they're currently going through in the prepackaged bankruptcy to save the company then liquidate it? Plus they're making new leases, new contracts etc. as part of the restructuring. If they wanted to sell it in pieces they would have already arranged to do that.

Any store a competitor wanted has been for sale up until now with the filing, and as we know many stores were sold for their prescription files. Many closures have been reported here as not making sense because they are good stores, and that is a likely result of the RAD corporate office basically taking bids on any existing asset for immediate cash liquidity to keep the company running while their lawyers and experts were working over the creditors to convince them to accept equity in a new company instead of forcing a complete liquidation and closure of Rite Aid nationwide (which is most likely what they would have preferred).

It remains to be seen if any leases were also sold previously and if those stores will be reopening as a competitor. Both CVS and Walgreens are the only likely buyers and we all know that they have aggressive store closure programs either running or completed so outside of the PNW where they have a limited footprint I doubt they have any interest in adding more real estate except for a handful of instances where maybe it's a small town and RAD had a much nicer building and there's no availability/too expensive to replace their own store. But anything selling to a competitor would most likely be in the stores that closed before the filing and they would not be obligated to tell us, so if you see a recently closed Rite Aid with a CVS coming soon sign, well now you know. RAD could have required buyers to take the box empty too.

I don't see CVS or Walgreens taking anything but rural locations that lack competition. There are a lot of rural locations they could take where either or both are not currently present all over the west coast. What I wonder is at this point does Walgreens care that they have no presence at Lake Tahoe but CVS does? Maybe they don't even care anymore they have such big issues over at Walgreens corporate. But in places like Bishop, Mammoth Lakes, Quincy, Yreka, someone would absolutely come forward to take those stores over as there is no CVS or Walgreens there. I think those are some of Rite Aid's best stores and very few of them have closed; these are a mixture of Thrifty and Payless units, and a number of these locations previously had both Thrifty and Payless if you go back to the early 90's.

Also I think we want to keep in mind this bankruptcy filing probably wouldn't have happened if it wasn't for the opioid situation... they are taking advantage of this to close a ton of stores/get out of a bunch of leases.

I hope you are right they emerge as a debt free profit machine. But I am suspicious the opioid lawsuits people will agree to a long term settlement with them over time out into the future. I hope I'm wrong regarding this.

[veteran+]

So, a RA like the one in West Hollywood on Sunset Bl. would stay with the re-organised company?

It's a very busy 24 hour store!

[Romr123]

Again, I think the Detroit Big 2 bankruptcy is instructive...there was agreement on everything which was included, and there was repudiation of anything legal happening before the bankruptcy....if you had an injury from a pre-bankruptcy injury you were essentially out of luck.

[ClownLoach]

@submariner is there any way we can clean up all these separate Rite Aid threads with a single new one, preferably without an inflammatory subject line?