Rite Aid maybe closing up to 117 stores

[BabyBlissProducts]

Rite Aid maybe closing up to 117 stores.

Large writedown almost doubles Rite Aid 4Q loss



NEW YORK -- After Rite Aid Corp.'s loss doubled in the the fiscal fourth quarter, the drugstore operator is planning to shut down as many as 117 stores over the next year as it tries to cut costs.
The Camp Hill, Pa., company said the closings will be scattered around the country, targeting stores with weak sales and those that are close to another Rite Aid. Saddled with debt and acquired stores that are not living up to expectations, Rite Aid is working to cut inventory and expenses.
Rite Aid said its fourth-quarter results were hurt by the recession, along with a fairly mild cough, cough and flu season and the introduction of new low-cost generic drugs.






About 70 of the stores slated for closure used to be part of the Brooks Eckerd chain. Rite Aid bought 1,850 of those stores in June 2007 for $2.36 billion, but they have not done as well as Rite Aid's older stores, a trend continued in March.
Rite Aid had 4,901 stores in 31 states at the end of February, and the moves will leave it with about 2,000 stores less than rivals CVS Caremark Corp. and Walgreen Co. The retailer plans 20 store openings and 55 relocations in fiscal 2010, which ends next Feb. 28.
Rite Aid closed 200 stores in fiscal 2008, cutting its store count by 158.
The company plans to eliminate 67 stores by the end of May, including 12 stores that were recently sold to Walgreen. Rite Aid also said it will close a distribution center in Newnan, Ga. It has announced two distribution center closings this year, cutting about 360 jobs at an estimated savings of $4.9 million a year.
Rite Aid acquired the distribution centers as part of the Brooks Eckerd purchase.
In the fiscal fourth quarter, Rite Aid reported a loss attributable to common stockholders of $2.3 billion, or $2.67 per share. It lost $960.4 million, or $1.20 per share, a year ago. Because of the plunging value of Rite Aid stock, the company wrote down the value of its assets by $1.81 billion. About $1.2 billion of that expense came from writing down the value of the Brooks Eckerd stores.
Chairman and Chief Executive Mary Sammons said the $1.2 billion write-down of the former Brooks Eckerd stores "is not a true reflection of the long-term benefit we expect to see from our acquired stores." On the company conference call, she added that the newer stores have not met Rite Aid's original expectations, but pharmacy results are improving.
Rite Aid shares have been trading under $1 since September and closed at 39 cents on Wednesday. The company plans to boost its share price later this year with a reverse stock split.
Rite Aid shares rose 6 cents, or 15.4 percent, to close at 45 cents Thursday. They set an all-time low of 20 cents last month.
Excluding the write-downs and a number of other one-time costs, Rite Aid lost $116.9 million, or 14 cents per share. Revenue fell 2 percent, to $6.71 billion, in part because of the reduced store count.
Thomson Reuters says analysts expected a smaller loss of 11 cents per share and $6.71 billion in revenue.
Rite Aid's fiscal 2010 forecast was mostly below analyst estimates. The company said it expects to lose $210 million to $435 million for the year, or between 26 cents and 53 cents per share. It called for $26.3 billion to $26.7 billion in revenue, and said same-store sales would rise 0.5 to 2.5 percent.
Analysts expected a loss of 36 cents per share on $26.68 billion in revenue.
In fiscal 2009, Rite Aid reported a loss of $2.94 billion, or $3.49 per share, compared with $1.11 billion, or $1.54 per share in fiscal 2008. Its revenue rose 8 percent, to $26.29 billion from $24.33 billion.
In a note to clients, Standard & Poor's analyst Joseph Agnese said Rite Aid's poor financial condition creates a lot of risk, although sales are slowly improving and the company is making progress at reducing costs.
The Herald Online

[dealskillme]

It is sad. I like my riteaid. I usually goto the one in Apex, NC on highway 55. But yesterday I had severe migraine, found out I was out of imitrex and wanted my prescription transferred from Kmart to riteaid here on tryon rd. When I requested for the refill, the pharmacist was so rude, talked as if they are doing a favour to me by transferring. I was like ok thank you I dont want any prescription to be filled from this store even in my dream. Just came out of the store, called my doctor, spoke to her. She said she will give physicians sample to me immediately as she knows I can pass out if I dont control. I kick myself for using all the tablets last month(blame on the rain we had which triggers me headache). How can they be so rude? The store itself is in a pathetic stage as there are cvs and walgreens and harristeer pharmacy compete for everything.

[sindy9002]

It's a bad news. That's means many people will lose their job.

[rcbrad]

Since Rite aid is in severe trouble, you would think that the employees would bend over backwards to earn and keep our business! People who are rude or have poor attitudes for no reason do not belong in dealing with the public at all.

[mommycia]

It is sad. I LOVE my riteaid...just wish the deals were better lately. There are 2 checkers that I always use, and they are both sweethearts. 1 even noticed that someone else had used a higher value coupon than I had and pointed it out, it was in the insert that I hadnt cut up yet :)

[kimandkathess]

What is wrong here??? CVS has cut back on the decent ecb deals, Walgreens is losing their rebate/ivc coupon program, and now riteaid wants to close stores??? This really stinks big time!!

~~Katrina~~

[kimandkathess]

What is wrong here??? CVS has cut back on the decent ecb deals, Walgreens is losing their rebate/ivc coupon program, and now riteaid wants to close stores??? This really stinks big time!!

~~Katrina~~

[kimandkathess]

ooops....posted twice.

[cpaige]

I have 2 RA's within 1/4 mile of each other, as they bought out another store and opened newer one. With that being done, I'm not surprised that this is happening.

[Gransonec]

I like my local store and hope it's not on the chopping block. But, it is in a shopping center where the anchor store (Winn-Dixie) closed. Nothing else is in the shopping center except for some kind of health care thing and possibly a chinese restaurant, if it's still open. Even the McDonald's at the front of the shopping center has rebuilt itself - across the street. There are only 2 locations within a 20 or 30 mile drive of here. Hopefully, they decide to keep one open and it's mine. I've been shopping that store, since I was in elementary and it was a K&B Drugs location. The other one is in a poorer area, got robbed with 3 or 4 shooting victims last year and seems to be surviving on the sale of alcohol and cigarettes. Come to think of it, it's in a dead shopping center also. Hopefully, them not us.