Rite Aid closing at least 63 stores

[norcalriteaidclerk]

If there are only 6 Manhattan locations left then there is likely no reason not to close those too. They must have quietly decided to leave the market one or two stores at a time.

They don't really advertise anymore. I think as long as they have enough stores in NY to stay engaged in the health insurance networks needed to keep customers in the stores, those few stores can just stay. My guess is store count will go below 6 but not all the way to 0 in that market. Looking at the finances I think they can make it through this year but I question some of their forecasts. We will see what happens.

They've only had one store in NV for over a decade now. Past year-ish has not been kind to that store. Not sure what is going to happen. It appears it has lost a ton of prescription customers due to the limited hours.

They already ceded NY to Walgreens selling many stores there off, and the only reason much of anything is left in NY is because it was overlapping in the Walgreens deal so they just kept those stores.

They have retained a decent concentration in Buffalo/Niagara Falls but apparently as many as three locations in that area are closing soon(EDIT:Mainstream local media now confirms this):



As long as the California store count doesn't dip below 470 anytime soon.

[BillyGr]

If there are only 6 Manhattan locations left then there is likely no reason not to close those too. They must have quietly decided to leave the market one or two stores at a time.

They don't really advertise anymore. I think as long as they have enough stores in NY to stay engaged in the health insurance networks needed to keep customers in the stores, those few stores can just stay. My guess is store count will go below 6 but not all the way to 0 in that market. Looking at the finances I think they can make it through this year but I question some of their forecasts. We will see what happens.

They've only had one store in NV for over a decade now. Past year-ish has not been kind to that store. Not sure what is going to happen. It appears it has lost a ton of prescription customers due to the limited hours.

They already ceded NY to Walgreens selling many stores there off, and the only reason much of anything is left in NY is because it was overlapping in the Walgreens deal so they just kept those stores.

Don't forget, that is 6 in Manhattan, but there may be others in surrounding parts of NYC as well (since Manhattan is not the entirety of NYC, even though it seems that way at times)

[norcalriteaidclerk]

I must admit that I'm not a good corporate finance expert(maybe because for the longest time in all my years working for the company I had never been in a position to review such forms),but the annual 10-k filing has been released.I really have to wonder how much of this has been sugar-coated.Again I'm not setting any high expectations for FY2024Q1 given the circumstances.

[storewanderer]

At the end of the day, they need cash. Lots of "loss" items in the "earnings" are non-cash (depreciation, impairments, and such) and big numbers.

Buried on page 93 of the PDF is statement of cash flows.

At the end of the day the amount of cash they have is going to dictate how long they can keep going.

Looking here we see the ending cash in 2023 is equal to the ending cash in 2021 and a lot more cash than they ended 2022 with.

Unfortunately the main way they raised cash in 2023 was taking $491 million from the revolver (debt). In 2022 they paid off $141 million of the revolver. They actually made a lot of debt payments in 2021 and 2022. In 2023 that did not happen.

I still think they have time, the situation is not going to implode tomorrow, and if the financial performance somehow improves they could have a lot of years left. But it has to improve. Fast.

[ClownLoach]

At the end of the day, they need cash. Lots of "loss" items in the "earnings" are non-cash (depreciation, impairments, and such) and big numbers.

Buried on page 93 of the PDF is statement of cash flows.

At the end of the day the amount of cash they have is going to dictate how long they can keep going.

Looking here we see the ending cash in 2023 is equal to the ending cash in 2021 and a lot more cash than they ended 2022 with.

Unfortunately the main way they raised cash in 2023 was taking $491 million from the revolver (debt). In 2022 they paid off $141 million of the revolver. They actually made a lot of debt payments in 2021 and 2022. In 2023 that did not happen.

I still think they have time, the situation is not going to implode tomorrow, and if the financial performance somehow improves they could have a lot of years left. But it has to improve. Fast.

This matches what I saw in the BB&B earnings reports. About 3 quarters ago the only cash they had came from the revolver. That revolver needs to be used to buy merchandise. So based on the light shelves they are cutting back on buying product which in turn will cause a larger cash flow problem later. Companies forced to dip into those revolver lines and can't pay them back get in trouble very fast. So yes indeed it has to improve, very fast.

What worries me more is the fact that so much product was removed and liquidated at high discounts, emptying out the stores. This ultimately was unproductive and negatively impacted sales; I'm sure the loss of many household goods doomed the Manhattan stores. But now they don't have the cash available to easily replace these items. Thank goodness they didn't make more of those Winchester type stores. There is no reason at all to shop there. Even the Stater Bros down the street has more traditional drugstore product. That new prototype is a complete loser.

[storewanderer]

This matches what I saw in the BB&B earnings reports. About 3 quarters ago the only cash they had came from the revolver. That revolver needs to be used to buy merchandise. So based on the light shelves they are cutting back on buying product which in turn will cause a larger cash flow problem later. Companies forced to dip into those revolver lines and can't pay them back get in trouble very fast. So yes indeed it has to improve, very fast.

What worries me more is the fact that so much product was removed and liquidated at high discounts, emptying out the stores. This ultimately was unproductive and negatively impacted sales; I'm sure the loss of many household goods doomed the Manhattan stores. But now they don't have the cash available to easily replace these items. Thank goodness they didn't make more of those Winchester type stores. There is no reason at all to shop there. Even the Stater Bros down the street has more traditional drugstore product. That new prototype is a complete loser.

I am seeing some improvements in inventory levels in some locations, but a couple hopeless locations I am watching seem to be perpetually broken beyond repair and can't clean up or restock for some reason. I am suspicious it is theft issues also. They are getting seasonal merchandise in on the schedule you'd expect it to be on.

I do wonder who made the decision to liquidate so many "non core" merchandise categories. Yet they kept almost a full aisle of "as seen on TV" stuff. I think I would have liquidated all of that crap and kept a bit more of the limited household goods/picture frame hangers/hardware type items and other low value but "forever" shelf life high mark up type merchandise. They probably made the right decision liquidating certain categories like electronic accessories (clocks, etc.).

They have returned some of the previously liquidated merchandise though, but much less mix than before. There are a few kitchen items again, a toilet plunger reappeared, and office supplies was drastically re-expanded.

Someone has posted a ton of photos of that new store online. I took a look at the photos. It looks like a boutique or something. It doesn't even look or feel like a drug store. Or any kind of real store that should see hundreds of customers a day. It looks like the type of drugstore you'd see in a hospital. If I were Rite Aid, I would take and do an immediate renovation of this into the Wellness format and fix the shelf heights/aisle lengths/front end disaster.

However this new Rite Aid has far more merchandise mix than new CVS Stores have. If you want to see limited, go to a new CVS.

[BillyGr]

I do wonder who made the decision to liquidate so many "non core" merchandise categories. Yet they kept almost a full aisle of "as seen on TV" stuff. I think I would have liquidated all of that crap and kept a bit more of the limited household goods/picture frame hangers/hardware type items and other low value but "forever" shelf life high mark up type merchandise. They probably made the right decision liquidating certain categories like electronic accessories (clocks, etc.).

Going way back to when they did the Single Check Rebates (where you could buy items throughout the month, enter the receipts electronically and then get one rebate check back), it always seemed to be a question if they really sold any of the electric items (like extension cords, timers, etc.) at regular prices, or if they only sold them with the rebates.

Given that something like a timer was regularly $12.99, would be on sale for $5 or so and then get a rebate of the same amount (meaning your net cost for one was the tax on the sale price), cords regularly $5 or so, on sale for $1 or $2 and an equal rebate, it seems unlikely that they were big sellers and that the rebate offers every so often were just to be sure the items didn't sit around too long.

[ClownLoach]

This matches what I saw in the BB&B earnings reports. About 3 quarters ago the only cash they had came from the revolver. That revolver needs to be used to buy merchandise. So based on the light shelves they are cutting back on buying product which in turn will cause a larger cash flow problem later. Companies forced to dip into those revolver lines and can't pay them back get in trouble very fast. So yes indeed it has to improve, very fast.

What worries me more is the fact that so much product was removed and liquidated at high discounts, emptying out the stores. This ultimately was unproductive and negatively impacted sales; I'm sure the loss of many household goods doomed the Manhattan stores. But now they don't have the cash available to easily replace these items. Thank goodness they didn't make more of those Winchester type stores. There is no reason at all to shop there. Even the Stater Bros down the street has more traditional drugstore product. That new prototype is a complete loser.

I am seeing some improvements in inventory levels in some locations, but a couple hopeless locations I am watching seem to be perpetually broken beyond repair and can't clean up or restock for some reason. I am suspicious it is theft issues also. They are getting seasonal merchandise in on the schedule you'd expect it to be on.

I do wonder who made the decision to liquidate so many "non core" merchandise categories. Yet they kept almost a full aisle of "as seen on TV" stuff. I think I would have liquidated all of that crap and kept a bit more of the limited household goods/picture frame hangers/hardware type items and other low value but "forever" shelf life high mark up type merchandise. They probably made the right decision liquidating certain categories like electronic accessories (clocks, etc.).

They have returned some of the previously liquidated merchandise though, but much less mix than before. There are a few kitchen items again, a toilet plunger reappeared, and office supplies was drastically re-expanded.

Someone has posted a ton of photos of that new store online. I took a look at the photos. It looks like a boutique or something. It doesn't even look or feel like a drug store. Or any kind of real store that should see hundreds of customers a day. It looks like the type of drugstore you'd see in a hospital. If I were Rite Aid, I would take and do an immediate renovation of this into the Wellness format and fix the shelf heights/aisle lengths/front end disaster.

However this new Rite Aid has far more merchandise mix than new CVS Stores have. If you want to see limited, go to a new CVS.

I'm going to just agree to disagree. There is less GM product in newer small CVS stores for sure, but at least they have all the medications and personal care items you need. The new Rite Aid prototype has too little of anything to matter. It isn't a small store by any means either, but I've been in little old neighborhood pharmacies with a higher SKU count.

[storewanderer]

I'm going to just agree to disagree. There is less GM product in newer small CVS stores for sure, but at least they have all the medications and personal care items you need. The new Rite Aid prototype has too little of anything to matter. It isn't a small store by any means either, but I've been in little old neighborhood pharmacies with a higher SKU count.

I'm not sure you have seen the latest model CVS Store...

Check Google Maps for 1250 West 7th Street in Reno. There are quite a few photos there of the new store showing the aisles and how extremely limited the mix is and how small the facings of everything are.

I thought this new CVS had everything I needed the first couple times I shopped it after it reopened too. I was really impressed how they packed such a mix into such a small space. Since then, due to the excessive number of out of stocks I kept experiencing, and some really poorly done resets that are NOT complete mixes in various categories, I finally quit going there last fall because I could never find what I needed or even a suitable substitute item.

Those out of stocks in the CVS- all theft. The front end employee (there is only one) ignores customers. They have a bell buried on the counter up front and a closed sign on the counter, and ONE single self checkout. Multiple times I've gone up to pay and the self checkout has an abandoned transaction on it but no merchandise in sight. Complaints to the CVS District Manager were responded to with nothing but lip service and nothing changed but the shelves keep getting emptier and emptier.

The mix in this little CVS also matches the mix in two other 1.5x the size CVS units in Reno that had significant SKU cuts to become "Health Hub" Stores.

[ClownLoach]

I'm going to just agree to disagree. There is less GM product in newer small CVS stores for sure, but at least they have all the medications and personal care items you need. The new Rite Aid prototype has too little of anything to matter. It isn't a small store by any means either, but I've been in little old neighborhood pharmacies with a higher SKU count.

I'm not sure you have seen the latest model CVS Store...

Check Google Maps for 1250 West 7th Street in Reno. There are quite a few photos there of the new store showing the aisles and how extremely limited the mix is and how small the facings of everything are.

I thought this new CVS had everything I needed the first couple times I shopped it after it reopened too. I was really impressed how they packed such a mix into such a small space. Since then, due to the excessive number of out of stocks I kept experiencing, and some really poorly done resets that are NOT complete mixes in various categories, I finally quit going there last fall because I could never find what I needed or even a suitable substitute item.

Those out of stocks in the CVS- all theft. The front end employee (there is only one) ignores customers. They have a bell buried on the counter up front and a closed sign on the counter, and ONE single self checkout. Multiple times I've gone up to pay and the self checkout has an abandoned transaction on it but no merchandise in sight. Complaints to the CVS District Manager were responded to with nothing but lip service and nothing changed but the shelves keep getting emptier and emptier.

The mix in this little CVS also matches the mix in two other 1.5x the size CVS units in Reno that had significant SKU cuts to become "Health Hub" Stores.

It looks remarkably like the new Rite Aid prototype. Almost like it could have been planned to be one. But it still looks like it has a higher SKU count and less wasted floor space. The pictures don't do the new Rite Aid prototype justice, I think 40% or more of sales floor is unproductive empty space. Plus the lead of every aisle is a weird short fixture about 4' tall or less and it holds nothing. The stores here converted to Health Hub lost a good portion of the GM product. What Rite Aid has managed to do with the new prototype is open a store the same size as this CVS but try to carry every category imaginable in the space, with comical results. This is why they have maybe a dozen choices total for bandages, but they've got everything you need to start your own vegetable plants from seed. Everything that is... Except the seeds themselves (you can't make this stuff up). They should have not put a single SKU in the store that wasn't either cosmetics, personal care, health care, or food. Instead they dilute the assortment so badly that like I mentioned earlier their food assortment looks like what you might expect in a Circle K, and the Healthcare products are a far smaller assortment than Stater Bros who runs two aisles of non food in most stores. There is definitely more "mix" in the new Rite Aid vs CVS, but it just causes every single category to be comically small and makes the whole store absolutely worthless. I took my wife there and walked through it again, she was puzzled as to how the store had so little product. And we lived next to the Irvine Los Olivos tiny format store, it was a beautiful little store with fancy fixtures ("pushers" on every item etc.) and expensive lighting/flooring. It was at the time the smallest Rite Aid I had seen, but it still has at least triple the SKU count of Winchester in the same size space (maybe even smaller).