Rite Aid closing at least 63 stores

[mburb1981]

New closure docket dropped today, and it has one Michigan store - the Woodward/Square Lake store, one of two in Bloomfield Township. Woodward/Square Lake is an upper-class area, although it is a stone's throw away from Pontiac city limits and a Rite Aid two miles from this one recently closed.

[storewanderer]

No OR/WA closures yet again. I really think those two states, what is left of them, has been spoken for.

[storewanderer]

They are now asking for an extension to July 31 to make decisions on lease rejections...

This would imply they still plan to be in bankruptcy on July 31...?

This is not looking good to me, a month ago it felt like they were making preparations to emerge soon... now I see stores with hardly any inventory and what seems like a bankruptcy case that keeps getting extended... layoffs of long tenured store level employees in stores that are busy and staying open...

Meanwhile JoAnn exited bankruptcy.

[babs]

They are now asking for an extension to July 31 to make decisions on lease rejections...

This would imply they still plan to be in bankruptcy on July 31...?

This is not looking good to me, a month ago it felt like they were making preparations to emerge soon... now I see stores with hardly any inventory and what seems like a bankruptcy case that keeps getting extended... layoffs of long tenured store level employees in stores that are busy and staying open...

Meanwhile JoAnn exited bankruptcy.

With little inventory and stores deserted of customers, wouldn't they need more DIP financing to survive that long?

CVS just needs to make a low ball offer to take the OR/WA stores.

[ClownLoach]

They are now asking for an extension to July 31 to make decisions on lease rejections...

This would imply they still plan to be in bankruptcy on July 31...?

This is not looking good to me, a month ago it felt like they were making preparations to emerge soon... now I see stores with hardly any inventory and what seems like a bankruptcy case that keeps getting extended... layoffs of long tenured store level employees in stores that are busy and staying open...

Meanwhile JoAnn exited bankruptcy.

With little inventory and stores deserted of customers, wouldn't they need more DIP financing to survive that long?

CVS just needs to make a low ball offer to take the OR/WA stores.

The odd thing is that the DIP is basically the new credit line from the new owners, so they should not have any trouble getting it extended.

This has to be the result of the DOJ dragging out the process with the opioid settlement. They can't exit bankruptcy until that is resolved. Right now they can't transfer ownership free and clear to the new owners (the creditors/banks). They are trapped by the DOJ.

Worse, these vendors who will not supply companies in bankruptcy are going to shift their capacity to other retailers so it will be difficult to come back to Rite Aid later and they will probably be their last priority. This is why they have so many empty shelves, because companies such as most regional Coca-Cola bottlers won't deliver to anyone in bankruptcy. The longer they're in bankruptcy, the longer shelves sit empty, the more customers they lose.

I will say this: in every other retail bankruptcy case I can recall there wasn't any extension. As soon as the clock hit midnight on the deadline and the issues weren't resolved then the creditor committee was handed the reins by the trustee and the liquidators were called to submit their bids to shut it down. To put it more clearly: if there wasn't a 100% commitment by the creditors to take ownership of this thing then it would be fully liquidating right now.

[mburb1981]

Took a quick look into the Dearborn, Michigan store this afternoon and it looked pretty well stocked from what little I saw of it, so that region is probably preforming better.

[reymann]

It will be a matter of time until Rite Aid's luck runs out. At some point they may have to do a combination of liquidating and selling remaining stores to CVS.

[ClownLoach]

It will be a matter of time until Rite Aid's luck runs out. At some point they may have to do a combination of liquidating and selling remaining stores to CVS.

Do you think the banks are going to run out of money? They bought it.

[reymann]

It will be a matter of time until Rite Aid's luck runs out. At some point they may have to do a combination of liquidating and selling remaining stores to CVS.

Do you think the banks are going to run out of money? They bought it.

I think it would be more likely that banks run out of patience with the DOJ

[ClownLoach]

It will be a matter of time until Rite Aid's luck runs out. At some point they may have to do a combination of liquidating and selling remaining stores to CVS.

Do you think the banks are going to run out of money? They bought it.

I think it would be more likely that banks run out of patience with the DOJ

They can sue the DOJ, and should, for malicious prosecution and intentional interference with a court proceeding. The DOJ has already created a unreasonable overreach with this case. Bankruptcy means bankruptcy, and the DOJ thought they could get away with being above the law. For government agencies that is usually par for the course. For the DOJ, it is absolutely unacceptable in every way shape and form. They should know better. In fact I would not be surprised if the banks do sue the DOJ for damages once the transaction is complete because they are not acting in good faith.

Also remember that all the income coming in is sitting in a pile, and can only be touched for basics like paying the employees, ordering merchandise, paying the rent and utilities etc. Ironically that money doesn't go to paying the DIP financing. So they might be exhausting the DIP but I would assume they have the money on hand to pay it off too. If they didn't then I think the banks would have already pulled the plug. So it must be generating positive cash flow.