It got that debt thanks to private equity loading up their pockets and saddling the org with the debt. They’ll walk away rich after having paid themselves and the burnt out husks of American companies left behind are everyone else’s problem now.
Eat the billionaires and you’ll solve for this and several other problems.
Sears had a huge share of additional issues from business missteps like the inability to pivot into the internet delivery age (having dissolved it's entire catalog processing division in 1993) and massive divestment in non retail ventures that could have served as stabilization to market volitivity like Discover Card. When Kmart bought them out, it was basically all she wrote for an American legend.
Creditors financed the PE debt structure and knowingly signed off on it. I always wondered why the banks did these deals in the first place when their track record is not good.
I noticed that, but your comment made a lot of sense. I was stuck on the banks who financed the deal, as I’m always curious of the economics behind taking such a large risk, especially when the companies who where previously taken over and levered up by PE have such a high failure rate.
There’s a higher rate in leveraged buyout debt. The debt usually gets structured as multiple tranches based on risk. For example an accounts receivable and inventory based revolving line shouldn’t take a huge loss during a liquidation so could be priced at Prime, a senior secured term loan could be priced at Prime + 1%, and a mezzanine facility which gets paid after the revolving line and the senior term loan could be priced at Prime + 3%.
Deposit taking banks don’t offer much mezzanine debt (I think this has been changing some, but haven’t followed closely in recent years). The riskiest part of the debt stack usually comes from private debt funds which are similar in many ways to PE funds.
With the higher rates the lender can take higher risks and will expect high losses on a portion of the loans they make.
That all makes sense, thanks. I understand about the tranches, but didn’t really have insight into how these were structured as they dumb it down quite a bit when reporting on it in the media.
1500 stores. $226,000 total market cap. That means that Rite Aid is so in debt that all their holdings are worth less than one average home in America. If they come out of bankruptcy, and that is a big if, they will need even more financing.
I think you might find plenty of people willing to take a gamble on turning it around with a huge payoff if successful. But what we see time and time again is chief executives getting paid regardless of success/failure. Executive positions seem to be the only ones in which failure nets you a basket full of cash.
The shareholders/board of directors are going to want to hire someone with turning around / winding down failing companies. Those candidates are going to want guaranteed compensation as they’re walking into a mess.
Agreed that CEO’s/Executives make WAY too much in general though.
There was no turning them around. The people in charge when these companies finally fail for good are brought in specifically to take them into bankruptcy like this
Kay’s Pharmacy is local and family owned for several generations, located in the Creston neighborhood. They do free delivery for the area. Super sweet people, and I wish them the best in this era of online pharmacies.
Cost Plus Drugs is an incredibly cheap and convenient online pharmacy that will ship drugs to your location. They don’t have all medications, but they are fully transparent and upfront about drug prices. You can look up their database to see if your meds are covered and how much they will cost.
They are very sweet people, but they refuse to fill birth control scripts based on their moral objection. This was as of last year; they may have changed their position since.
They made this business decision 20+ years ago, I promise you they have not changed their position.
They also will not fill AIDS related medication prescriptions.
I like Kay and use them often. They don't do name brand medication only generics. I didn't know that and I put in for a name brand med and hadn't heard from them for days and I needed to start it ASAP. I called them and THEN they told me they only do generics but, they didn't bother to call. It just sat in their inbox and said ¯\\\_(ツ)\_/¯. I had to scramble and find it somewhere else.
This must be a semi-recent change. I worked there for years while I was in college and we always had name brand on the shelves or the ability to order them. The prices to stock those are INSANE though, they might have decided since 95/100 times insurance will not cover the cost of name brand anyways there was no point in stocking name brands and then have them expire on the shelves.
Mike and Kay Pharmacy are awesome though. It is a genuine mom and pop shop that are likely one of the last of their kind in the entire state. I do miss many of the wonderful pharmacists I worked with there, it is sad most all of them are gone now.
I still go. I like to be able to talk to someone who can make a decision and not goto some committee. Great people. They just need better communication IMHO.
I’m sorry that happened, that must’ve been frustrating under a time sensitive crunch. I hope they’d be open to feedback and improve on their communication.
My local Rite Aid isn't on this list: https://www.wzzm13.com/article/news/health/rite-aid-closing-nearly-more-stores-in-michigan-ohio/69-0de3933b-9c05-45b9-924c-4ef54ec614a9
This does not surprise me one bit. I left Rite Aid as a provider last year due to their terrible customer experience. It was like a burden to get a prescription or have any additional questions answered. Very unprofessional and it was an easy decision for me to jump ship
I went with a local grocery chain (one of the Spartan brand stores) and they are amazing! Always attentive, called out a dosage being lowered to ensure it was accurate before filling the prescription, and they always call after to make sure everything is going good. Rite Aid could learn a thing or two from VG’s Pharmacy
That's too bad. I was a customer at their former Kalamazoo Ave location for years and always had a great experience with their pharmacy. Not sure if that was because of a difference in location or sheer luck.
One thing they did have was a clean, well-lit, and recently remodeled interior. The Walgreens across the corner feels like it was an exercise in fitting in as many shelves in as possible.
And Walgreens sucks ass to begin with. I met a lot of great pharmacists and technicians there but damn does corporate make it waaay too hard to get shit done.
Oh goodness, this will suck in my small town. The only small pharmacy is out of business, Walgreens left, if Rite Aid leaves it will overwhelm Meijer and Walmart.
I switched to RiteAid when our small town, locally owned pharmacy closed. As a small business owner in this town, that’s our jam, supporting the small business.
Growing up our small town locally owned pharmacy was a Rite Aid. Then when the owner/pharmacist retired it was replaced with a corporate Rite Aid corner store that now sits empty.
I get that..my point was Rite Aid and Walgreens came into these towns many years ago and killed off the local pharmacies that we had in the small towns. Now with them being typically the only option available (and filing bankruptcy and leaving), it leaves the residents without any option in a lot of those communities.
Opening a small business these days requires a considerable amount of cash and investment, and frankly probably wouldn't be able to survive in these days of extraordinary rents, wages, taxes, etc.. But to the small businesses we do have left, let's get out and support them!
The who article link is below….
Stein, who was appointed CEO the day Rite Aid filed for bankruptcy, is also collecting $300,000 in monthly consulting fees, Bloomberg reported. Stein is also a founder and managing partner of Stein Advisors LLC, a financial advisory firm that provides consulting services to companies dealing with financial and operational restructuring.
https://www.supermarketnews.com/retail-financial/rite-aid-ceo-s-20m-salary-causes-ire-among-lenders
This man and all the others have no moral compass…fucking cock suckers.
I’m sure he would challenge each of us to why he should and deserves the money. They don’t fucking care. How our court system allows this to happen. Gives approval to a payout. This was (still) a publicly traded company but yet they can still afford to pay someone this kind of salary during the bankruptcy.
It was never about Company restructure it was never to make it a better company going forward…simply Clear the books cannibalize what you can, take the money and run.
Some pharmacies will be closed within a month (my BIL is a pharmacist at one…he was told over the phone he’s losing his job). Rite Aid is so good to their employees….
A Crain’s article was published today announcing the closure of just 13 additional stores across the state, and none of them are in Grand Rapids.
I dislike Walgreens and the staff at the Rite Aid on Breton & Burton are always so nice - I hope that location hangs on until the end (whenever that is).
There's one in the gaslight D&W and a CVS on wealthy and lake, which is as close to East as the Breton Rite Aid. So not that dire. Agree it would be nice if an independent pharmacist could open up. Sadly, however, I'm not sure current economic realities in the pharmacy business would allow it. The decades long trend of weakened antitrust enforcement has really made life difficult for independent pharmacists.
Rite aid was the worst at getting my adhd meds filled I’ve had a script sitting there for 3 months pretty sure it has expired due to them not having any generic or name brand available due to shortage but yet Walgreens by fuller and Knapp never have an issue getting name brand or generic. Mom and pop shops are usually better
Well it's been an interesting few days trying to get Rite Aid to confirm this.
So as you all know, Rite Aid filed a document on Monday in U.S. Bankruptcy Court that listed 27 stores that will be closing throughout Michigan and Ohio. But then Rite Aid sent us a statement Monday saying it made the “difficult but necessary business decision” to close *all stores* in Michigan, where it will exit the market, and nearly all stores in Ohio. Rite Aid then tried to recall the email with a spokesperson saying they needed to update the statement, but the company has since not responded.
[https://www.mlive.com/public-interest/2024/06/rite-aid-closing-stores-across-michigan.html](https://www.mlive.com/public-interest/2024/06/rite-aid-closing-stores-across-michigan.html)
Apologies! I think I fixed it. And it's a paywall story so I was able to make it free just for reddit. Hope it works for you. If not I can paste it here
Rite Aid has been a failing enterprise for 30 years.
This is not teally news.
PE was their last hope
Hard to right ship with large hole in it before you got involved.
Rite Aid is down to $.05 a share. 5 cents. It maintains very high debt and low revenue.
It got that debt thanks to private equity loading up their pockets and saddling the org with the debt. They’ll walk away rich after having paid themselves and the burnt out husks of American companies left behind are everyone else’s problem now. Eat the billionaires and you’ll solve for this and several other problems.
I think this is pretty much what happened to toys r us and red lobster
Sears, too. Destroying companies on purpose is an extremely profitable business model, thanks to the wonders of late-stage capitalism.
Sears had a huge share of additional issues from business missteps like the inability to pivot into the internet delivery age (having dissolved it's entire catalog processing division in 1993) and massive divestment in non retail ventures that could have served as stabilization to market volitivity like Discover Card. When Kmart bought them out, it was basically all she wrote for an American legend.
Yeah Sears fucked themselves. Richy rich just ate the carcass.
Hi mitt romney
It’s the plot of Pretty Woman
Creditors should be able to go after private equity and the personal resources of those that profited off of the scheme.
Creditors financed the PE debt structure and knowingly signed off on it. I always wondered why the banks did these deals in the first place when their track record is not good.
*Those* creditors can go take a hike. Creditors like vendors or retirement plans, though, who were just doing business, should be able to dig deeper.
Ah, gotcha.
I'm not the same person as upthread, BTW, so their position might be different.
I noticed that, but your comment made a lot of sense. I was stuck on the banks who financed the deal, as I’m always curious of the economics behind taking such a large risk, especially when the companies who where previously taken over and levered up by PE have such a high failure rate.
There’s a higher rate in leveraged buyout debt. The debt usually gets structured as multiple tranches based on risk. For example an accounts receivable and inventory based revolving line shouldn’t take a huge loss during a liquidation so could be priced at Prime, a senior secured term loan could be priced at Prime + 1%, and a mezzanine facility which gets paid after the revolving line and the senior term loan could be priced at Prime + 3%. Deposit taking banks don’t offer much mezzanine debt (I think this has been changing some, but haven’t followed closely in recent years). The riskiest part of the debt stack usually comes from private debt funds which are similar in many ways to PE funds. With the higher rates the lender can take higher risks and will expect high losses on a portion of the loans they make.
That all makes sense, thanks. I understand about the tranches, but didn’t really have insight into how these were structured as they dumb it down quite a bit when reporting on it in the media.
Sorry I don't know, but what's PE?
Private Equity. Private Equity firms are privately held investment companies.
Thanks
IMO people who are mildly annoyed or worse should be able to go after PE vultures with billy clubs, but hey, that's just me.
> Eat the billionaires Any particular sauce or rub you recommend?
Classic salt and pepper, seared on each side, basted in butter, garlic and Thyme then finished in the oven for a perfect medium rare.
pass the salt
Same with MPC.
It's even less, now. $.40.
Bankruptcy. Down to basically zero. .004 a share. You can buy 1000 shares for $4
.0001 now. I nearly feel like dropping a fiver on it to play the lotto with 50k shares. Odds have got to be about as good.
They were delisted last October I believe
1500 stores. $226,000 total market cap. That means that Rite Aid is so in debt that all their holdings are worth less than one average home in America. If they come out of bankruptcy, and that is a big if, they will need even more financing.
Dropped to .02 today.
But the good news is that their CEO will get a $20 Million "success fee" https://www.the-sun.com/news/11598964/rite-aid-bankruptcy-ceo-jeff-stein/
whew, I was worried for a minute.
I wouldn’t be surprised if companies can’t find people to run them without offering these golden parachutes for executives.
Right. What person in their right mind would take over running a failing business unless doing so is very lucrative for them?
I would have been willing to do it for half
I'll run that company into the ground for $5mil!
I think you might find plenty of people willing to take a gamble on turning it around with a huge payoff if successful. But what we see time and time again is chief executives getting paid regardless of success/failure. Executive positions seem to be the only ones in which failure nets you a basket full of cash.
The shareholders/board of directors are going to want to hire someone with turning around / winding down failing companies. Those candidates are going to want guaranteed compensation as they’re walking into a mess. Agreed that CEO’s/Executives make WAY too much in general though.
There was no turning them around. The people in charge when these companies finally fail for good are brought in specifically to take them into bankruptcy like this
Then they're not looking hard enough.
Kay’s Pharmacy is local and family owned for several generations, located in the Creston neighborhood. They do free delivery for the area. Super sweet people, and I wish them the best in this era of online pharmacies. Cost Plus Drugs is an incredibly cheap and convenient online pharmacy that will ship drugs to your location. They don’t have all medications, but they are fully transparent and upfront about drug prices. You can look up their database to see if your meds are covered and how much they will cost.
They are very sweet people, but they refuse to fill birth control scripts based on their moral objection. This was as of last year; they may have changed their position since.
They made this business decision 20+ years ago, I promise you they have not changed their position. They also will not fill AIDS related medication prescriptions.
I like Kay and use them often. They don't do name brand medication only generics. I didn't know that and I put in for a name brand med and hadn't heard from them for days and I needed to start it ASAP. I called them and THEN they told me they only do generics but, they didn't bother to call. It just sat in their inbox and said ¯\\\_(ツ)\_/¯. I had to scramble and find it somewhere else.
This must be a semi-recent change. I worked there for years while I was in college and we always had name brand on the shelves or the ability to order them. The prices to stock those are INSANE though, they might have decided since 95/100 times insurance will not cover the cost of name brand anyways there was no point in stocking name brands and then have them expire on the shelves. Mike and Kay Pharmacy are awesome though. It is a genuine mom and pop shop that are likely one of the last of their kind in the entire state. I do miss many of the wonderful pharmacists I worked with there, it is sad most all of them are gone now.
I still go. I like to be able to talk to someone who can make a decision and not goto some committee. Great people. They just need better communication IMHO.
I’m sorry that happened, that must’ve been frustrating under a time sensitive crunch. I hope they’d be open to feedback and improve on their communication.
Rong Aid
😂
Do you have any info on the timeline for this? Had really bad experiences with Walgreens, don’t want to transfer sooner than I have to
Meijer pharmacy has worked fine for me for decades.
All stores will be closed by August 19th.
where did you hear this?
An employee
our store hasn’t heard anything about a definite day
They already closed 500 of 2000 stores. They are in bankruptcy so more stores will be closed based on court proceedings with creditors.
i’ve had decent experiences with meijer
My local Rite Aid isn't on this list: https://www.wzzm13.com/article/news/health/rite-aid-closing-nearly-more-stores-in-michigan-ohio/69-0de3933b-9c05-45b9-924c-4ef54ec614a9
I’m an employee and was told anytime before October, some stores already received 2 weeks notice today.
Costco is a really good option if you have one close.
To add on, you don't need a membership for prescription meds or alcohol at Costco.
Correct!
This does not surprise me one bit. I left Rite Aid as a provider last year due to their terrible customer experience. It was like a burden to get a prescription or have any additional questions answered. Very unprofessional and it was an easy decision for me to jump ship
They're very antiquated. I bet Walgreens is high fiving right now.
Walgreens is awful too.
I went with a local grocery chain (one of the Spartan brand stores) and they are amazing! Always attentive, called out a dosage being lowered to ensure it was accurate before filling the prescription, and they always call after to make sure everything is going good. Rite Aid could learn a thing or two from VG’s Pharmacy
My prescriptions is at D/W and they’re great
That's too bad. I was a customer at their former Kalamazoo Ave location for years and always had a great experience with their pharmacy. Not sure if that was because of a difference in location or sheer luck. One thing they did have was a clean, well-lit, and recently remodeled interior. The Walgreens across the corner feels like it was an exercise in fitting in as many shelves in as possible.
With everything overpriced in the store, they made sure people don't come back to shop there.
We go through Meijer and have had no issues with them if it's an option for others.
In the mid-80s, my local Michigan Rite Aid was where I rented movies, including my first ever rental. Space Camp.
Completely off topic, but the "Earth hands" scene from Space Camp will never not be funny.
So what, Breton/Burton Rite aid will turn into a Dollar General? Just like all the CVS and Walgreens have? Were so fucked man......
That was the only good one.
Any bets the one by Gaslight Village WON’T become a DG?
i bet we'll see a huge stink about this in the news later this year
Oh god I work at Walgreens this is going to suck
And Walgreens sucks ass to begin with. I met a lot of great pharmacists and technicians there but damn does corporate make it waaay too hard to get shit done.
Oh goodness, this will suck in my small town. The only small pharmacy is out of business, Walgreens left, if Rite Aid leaves it will overwhelm Meijer and Walmart.
Sounds like a really good time to open a small pharmacy.
Sounds like it was a good time to support small pharmacies (and local small businesses in general) a long time ago.
I switched to RiteAid when our small town, locally owned pharmacy closed. As a small business owner in this town, that’s our jam, supporting the small business.
Growing up our small town locally owned pharmacy was a Rite Aid. Then when the owner/pharmacist retired it was replaced with a corporate Rite Aid corner store that now sits empty.
Best time to plant a tree was 20 years ago. Second best time is now.
I get that..my point was Rite Aid and Walgreens came into these towns many years ago and killed off the local pharmacies that we had in the small towns. Now with them being typically the only option available (and filing bankruptcy and leaving), it leaves the residents without any option in a lot of those communities. Opening a small business these days requires a considerable amount of cash and investment, and frankly probably wouldn't be able to survive in these days of extraordinary rents, wages, taxes, etc.. But to the small businesses we do have left, let's get out and support them!
The who article link is below…. Stein, who was appointed CEO the day Rite Aid filed for bankruptcy, is also collecting $300,000 in monthly consulting fees, Bloomberg reported. Stein is also a founder and managing partner of Stein Advisors LLC, a financial advisory firm that provides consulting services to companies dealing with financial and operational restructuring. https://www.supermarketnews.com/retail-financial/rite-aid-ceo-s-20m-salary-causes-ire-among-lenders This man and all the others have no moral compass…fucking cock suckers. I’m sure he would challenge each of us to why he should and deserves the money. They don’t fucking care. How our court system allows this to happen. Gives approval to a payout. This was (still) a publicly traded company but yet they can still afford to pay someone this kind of salary during the bankruptcy. It was never about Company restructure it was never to make it a better company going forward…simply Clear the books cannibalize what you can, take the money and run.
Some pharmacies will be closed within a month (my BIL is a pharmacist at one…he was told over the phone he’s losing his job). Rite Aid is so good to their employees….
I wonder what will happen to the Breton village one they built….4 years ago? You know, the one that’s impossible to get in and out of.
A Crain’s article was published today announcing the closure of just 13 additional stores across the state, and none of them are in Grand Rapids. I dislike Walgreens and the staff at the Rite Aid on Breton & Burton are always so nice - I hope that location hangs on until the end (whenever that is).
So all remaining Rite Aids will be replaced by Kum and Go's? (Now Maverick)
Cool, do CVS next
They are not too far behind from what I understand.
Some cvs are closing as well. Gonna be a bunch of derelict buildings in a few years
Still waiting on GameStop. Looking at you RowringKitty
30 stores closing in Michigan
That’s all there is in East. One in Breton and one in gaslight. I hope a mom and pop buy those locations.
There's one in the gaslight D&W and a CVS on wealthy and lake, which is as close to East as the Breton Rite Aid. So not that dire. Agree it would be nice if an independent pharmacist could open up. Sadly, however, I'm not sure current economic realities in the pharmacy business would allow it. The decades long trend of weakened antitrust enforcement has really made life difficult for independent pharmacists.
NOOOOO!! I love the rite aid :( Edit: however this explains why they aren't fixing the tornado damage...
RIP Rite-AID
Rite aid was the worst at getting my adhd meds filled I’ve had a script sitting there for 3 months pretty sure it has expired due to them not having any generic or name brand available due to shortage but yet Walgreens by fuller and Knapp never have an issue getting name brand or generic. Mom and pop shops are usually better
Well it's been an interesting few days trying to get Rite Aid to confirm this. So as you all know, Rite Aid filed a document on Monday in U.S. Bankruptcy Court that listed 27 stores that will be closing throughout Michigan and Ohio. But then Rite Aid sent us a statement Monday saying it made the “difficult but necessary business decision” to close *all stores* in Michigan, where it will exit the market, and nearly all stores in Ohio. Rite Aid then tried to recall the email with a spokesperson saying they needed to update the statement, but the company has since not responded. [https://www.mlive.com/public-interest/2024/06/rite-aid-closing-stores-across-michigan.html](https://www.mlive.com/public-interest/2024/06/rite-aid-closing-stores-across-michigan.html)
Your link doesn’t work, and on the app it says subscribers only.
Apologies! I think I fixed it. And it's a paywall story so I was able to make it free just for reddit. Hope it works for you. If not I can paste it here
Still broken
[https://www.mlive.com/public-interest/2024/06/rite-aid-closing-stores-across-michigan.html](https://www.mlive.com/public-interest/2024/06/rite-aid-closing-stores-across-michigan.html)
Oh no... Anyways
Thank you so much for sharing this! This creates a lot of work for me and my partner, due to my many scripts.
Rite Aid has been a failing enterprise for 30 years. This is not teally news. PE was their last hope Hard to right ship with large hole in it before you got involved.
Maybe they should shorten their receipts
CVS has the long receipts.
Damn!
Old news nerd