Rite Aid closing at least 63 stores

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Re: Rite Aid closing at least 63 stores

Post by Romr123 »

The two newest Michigan closures--Bridgman is a frontier store (I-94 nearly at the Indiana border with Lake Michigan on the other side) and has 3 stores remaining within 20 miles.

Clawson is kind of a weird store--outlot of a full-but-somewhat-oddly-distressed strip center (Dollar Tree/Burn Fitness gym/Staples/Ace Hardware) in an re-emergent post-war suburb with a stand-alone Aldi (which replaced the smallest remaining Farmer Jack location after they closed in 2007) at the other end, but the location is hidden in 3 directions by a car wash and Taco Bell which are right at the corner. The suburb is having a re-birth in the downtown area about a mile away--likely built about 20 years ago--store's in good shape the times I've been in there. 7 stores within 5 miles/9 within 6 miles remaining,

TBH I'm more encouraged that some of the "weirder/less conventional" stores in the surrounding areas (Ferndale/Berkley/Huntington Woods) and the urban stores are not seemingly affected by the closures--they are more integrated into downtowns/pedestrian friendly and would be tougher to replace. Their only real failing is low stock levels...staffing and cleanliness are both good.
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Re: Rite Aid closing at least 63 stores

Post by Super S »

ClownLoach wrote: November 28th, 2023, 7:08 pm
I'm having trouble understanding the comments of a years long process, because the bankruptcy is now and that's the only time these stores can be closed at no cost. They only get 120 days to assume, assign, or reject the lease. Since the entire company is being sold to the creditors that means that they will just assign the lease to the creditors as-is if they want to keep it and landlord won't cooperate on better terms.

In the very unlikely event that they can't get enough of a quorum then they can ask for an additional 90 days but I don't see that happening here. So assuming no extension is requested then these store closing announcements will stop entirely by February 19, 2024. I do think there could be a big wave of stores to end this, because like the Tahoe area if there are smaller markets where they had to close so many stores that they've lost their relevance then they'll just reject everything and pull out of that area even if they intended to stay.

If they're demanding a 100% cooperation level with the landlord taking on rent reductions and taking over maintenance, then those will be in conjunction with new leases starting with new term on or about that date meaning that it would now cost many millions of dollars to close a single store as most lease terminations are pro-rated. That alone will end piecemeal closures and file sales as they will not want to write fat multi million dollar checks in the near future to close stores that could've closed for free during this bankruptcy process.

So there just isn't any likelihood for Rite Aid to keep closing stores randomly like Sears did. They get this one shot ending in February and basically that's it. If the entire organization doesn't work out then it'll all close in another bankruptcy but it sounds like these guys plan to slash overhead so much that they will make nothing but profit from day one post Chapter 11 and just go from there.
I was just commenting about the similarity I am seeing to when Kmart and Sears were going through mass waves of closures, and how some far flung stores remained while basically every other store in a given region shuts down. Perception is a factor also, just like how many people think that Sears and Kmart are completely out of business, some people will think the same way because Rite Aid left their region.

It's hard for a business to make a comeback when you have a reputation for closing stores.
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Re: Rite Aid closing at least 63 stores

Post by ClownLoach »

Super S wrote: November 29th, 2023, 6:15 am
ClownLoach wrote: November 28th, 2023, 7:08 pm
I'm having trouble understanding the comments of a years long process, because the bankruptcy is now and that's the only time these stores can be closed at no cost. They only get 120 days to assume, assign, or reject the lease. Since the entire company is being sold to the creditors that means that they will just assign the lease to the creditors as-is if they want to keep it and landlord won't cooperate on better terms.

In the very unlikely event that they can't get enough of a quorum then they can ask for an additional 90 days but I don't see that happening here. So assuming no extension is requested then these store closing announcements will stop entirely by February 19, 2024. I do think there could be a big wave of stores to end this, because like the Tahoe area if there are smaller markets where they had to close so many stores that they've lost their relevance then they'll just reject everything and pull out of that area even if they intended to stay.

If they're demanding a 100% cooperation level with the landlord taking on rent reductions and taking over maintenance, then those will be in conjunction with new leases starting with new term on or about that date meaning that it would now cost many millions of dollars to close a single store as most lease terminations are pro-rated. That alone will end piecemeal closures and file sales as they will not want to write fat multi million dollar checks in the near future to close stores that could've closed for free during this bankruptcy process.

So there just isn't any likelihood for Rite Aid to keep closing stores randomly like Sears did. They get this one shot ending in February and basically that's it. If the entire organization doesn't work out then it'll all close in another bankruptcy but it sounds like these guys plan to slash overhead so much that they will make nothing but profit from day one post Chapter 11 and just go from there.
I was just commenting about the similarity I am seeing to when Kmart and Sears were going through mass waves of closures, and how some far flung stores remained while basically every other store in a given region shuts down. Perception is a factor also, just like how many people think that Sears and Kmart are completely out of business, some people will think the same way because Rite Aid left their region.

It's hard for a business to make a comeback when you have a reputation for closing stores.
My only guess is that they've evaluated the situation from a PR perspective and figured out that they're better off doing these small batches of closures every week because they stay out of the national news headlines. What absolutely kills these companies is when they have a large enough batch that it hits the national news headlines, which hasn't happened thus far. Guaranteed that if they waited and just ripped a batch of 600 or so closures at once it would be national news headlines and everyone would assume that the whole operation is gone... And then it would be. They're trying to stay under the radar and help people forget they filed chapter 11. It's crappy for employees to feel like they're in limbo, but I think they would feel that way regardless until the end of the process. And I'm sure that as leases are revised the local management is going to stores and telling them the good news that they're staying open.

I have to be honest, I expected nothing but doom because of the recent mismanagement of the company. Then they went into bankruptcy far more organized than I ever imagined and have their secured creditors support. The only red flag was McKesson who they resolved in a week. Obviously they got a new CEO and a bankruptcy firm that know what they're doing because I see no sign of a circus tent anywhere (ahem, BB&B probably hasn't returned it yet).

I expected that we would see a thousand or more closures simply because landlords would want nothing to do with them and wouldn't help out. Has anyone kept a running total of closures since the chapter 11 filing? It seems like it's less than 200? That seems to indicate that in general landlords must be really thinking things over before just telling Rite Aid that there won't be a negotiation. And none of us are privy to the internal evaluation of these stores either. They surely have a list of stores that they will never close that are the ones that keep the boat afloat, and we don't know how large that list is but there is no doubt that if a landlord on that list refuses to concede any savings they're going to keep the store lease as-is anyway.
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Re: Rite Aid closing at least 63 stores

Post by storewanderer »

I think they're over 300 closures since the Chapter 11 announcement. I think the miserable list they released on 11/28 pushed them over the 300 mark.

We also need to keep our eye on the docket as additional closure lists are released. There are a ton of rumors flying.

At some point they need to come out and reassure stores they have made substantially all closures like you point out. Regional management is so busy closing stores I don't think they've reassured any stores of anything.
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Re: Rite Aid closing at least 63 stores

Post by SamSpade »

storewanderer wrote: November 26th, 2023, 9:28 pm435 Liberty St. in Salem, OR closing 12/11.
Nuts. Another hit to downtown Salem/retail core.

Edit: I also see that the main Bartell (or what I always thought of as the "original" store) across from Westlake Center and sharing a block facing with Nordstrom in downtown Seattle was on the latest closure list.

This is where I first became enamored of Bartell. As a teenager with a severe sunburn from a trip to Wild Waves as part of a youth gathering, the pharmacist was respectful and helpful and directed me to the best aloe product to purchase for my long journey back to an out of state home.
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Re: Rite Aid closing at least 63 stores

Post by reymann »

RA may need to figure which regions would better off being divested instead of trying to operate with a handful of stores. the norcal mountain stores may be one of the areas where they may need to divest off to CVS and walgreens due to the inventory issues up there.
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Re: Rite Aid closing at least 63 stores

Post by storewanderer »

SamSpade wrote: November 30th, 2023, 9:55 am
storewanderer wrote: November 26th, 2023, 9:28 pm435 Liberty St. in Salem, OR closing 12/11.
Nuts. Another hit to downtown Salem/retail core.

Edit: I also see that the main Bartell (or what I always thought of as the "original" store) across from Westlake Center and sharing a block facing with Nordstrom in downtown Seattle was on the latest closure list.

This is where I first became enamored of Bartell. As a teenager with a severe sunburn from a trip to Wild Waves as part of a youth gathering, the pharmacist was respectful and helpful and directed me to the best aloe product to purchase for my long journey back to an out of state home.
Rite Aid seems to think that is the original Bartell too. Bartell store numbers are 69xx and that is store 6901.

That used to be a really busy Bartell but since COVID and the high office vacancy rate surrounding it I suspect business has gotten quite slow. Looking at recent Google Maps photos the store is pretty deserted looking.
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Re: Rite Aid closing at least 63 stores

Post by storewanderer »

reymann wrote: November 30th, 2023, 10:11 am RA may need to figure which regions would better off being divested instead of trying to operate with a handful of stores. the norcal mountain stores may be one of the areas where they may need to divest off to CVS and walgreens due to the inventory issues up there.
Seems rather than divest they just close the stores outright. No Walgreens at Tahoe/Truckee and no CVS in Gardnerville; neither one in Bishop; and Rite Aid just closes up.
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Re: Rite Aid closing at least 63 stores

Post by babs »

Looks like Rite Aid has a replacement for the Wilsonville DC. They are expanding the Bartells DC:
https://storebrands.com/rite-aid-expand ... ion-center
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Re: Rite Aid closing at least 63 stores

Post by storewanderer »

babs wrote: December 1st, 2023, 7:31 am Looks like Rite Aid has a replacement for the Wilsonville DC. They are expanding the Bartells DC:
https://storebrands.com/rite-aid-expand ... ion-center
It makes sense to put distribution in WA since they have a higher store concentration there.

It makes the Boise stores 9 hours from distribution instead of 7 hours from distribution but they seem to be closing most of those. Southern Oregon they could supply from Woodland if they wanted to.
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