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Rite Aid Corporation Message Board

  • riteaid47 riteaid47 Apr 14, 2010 11:12 AM Flag

    Has There EVER Been A Chain Drug BK w/o Buyout?

    Remember W.T. Grants, EJ Korvette, Caldor, Circuit City?...all VANISHED after BK.

    But the opposite seems true of chain drugstores. For example, Drug Fair, Thrift Drug, Duane Reade, Longs and dozens of others were acquired rather than just turning out the lights forever.

    Will RAD be the very first in the Chain Drug business to just go completely dark without a buyer after Chapter 10?

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    • EJ Korvettes is Vernado Corp...it is still a listed stock and doing well over the last the 30 years...they realized the property they owned that all its stores were on, became worth more than the stores themselves they cashed in sold it all and took the cash and started a whole new business...

    • Phar-Mor was still gone last time i Checked.

    • OK, now that I better understand the question, I have to say it seems very unlikely that Rite Aid would not be able to sell at least 1/3rd of their assets after BK. Doing a quick search, I couldn't find any drugstore chain of 100 or more stores which didn't either emerge from BK or at least sell off 1/3rd of its holdings during BK proceedings. It does indeed seem very unlikely that Rite Aid stores "would go completely dark without a buyer after Chapter 10". Assuming, of course, they ever end up going that route.

    • I'm going to assume this is an honest question and you are actually looking for an answer rather than an argument. If not, just let me know and I'll exit the thread. Anyway, off the top of my head, the first example that comes to mind would be Revco.

      They had about 2200 drugstores when they filed for BK in 1988. Emerged as an independent company about four years later. The common stockholders got flushed in the BK and received nothing. The insiders (who also held large amounts of now worthless common shares) gifted themselves part ownership of the new company to make up for their losses.

      Interestingly, Rite Aid made a play for Revco before it went BK but the owners successfully fought it off. Aparently they had more to gain via the BK route.

      • 1 Reply to hodjiii
      • It was not the "owners" who fought the Rite Aid acquisition of Revco. I specifically remember that it was intervention by the Federal Trade Commission, which disallowed the deal over concerns of monopoly in too many RAD-Rev markets.

        In any case, Revco was indeed acquired...by CVS! Check the Drug Store News article dated February 17, 1997 for details. So Revco is not the example I am looking for. Got anything else? BTW - I am not looking for an argument. I just cannot think of any drug chains that simply went dark like so many other retailers.

 
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