Rite Aid exec: Impossible to stop NYC store thefts

 Rite Aid reported a very difficult quarter on Thursday when the pharmacy chain reported a much larger-than expected loss, sending shares plunging 28% in the session. The loss was related to costs connected to its store-closing plan.

Some of those closures affected stores in New York City, where the retailer has been the victim of crime, specifically shoplifting.

Rite Aid’s chief retail officer Andre Persaud addressed the issue on the company’s earnings call Thursday, saying it is just about impossible to stop stealing in New York City shops.

"I think the headline here is the environment that we operate in, particularly in New York City, is not conducive to reducing shrink just based upon everything you read and see on social media and the news in the city" he said. 

Shrink, is a term used by retailers to describe theft.

The drug store chain said front-end gross profit was impacted by a $5 million increase in shrink particularly in urban locations.

Overall, Rite Aid reported a net loss for the quarter of $331.3 million, or $6.07 per share, compared with a net loss of $100.3 million, or $1.86 per share a year earlier.

The loss included a $252.2 million goodwill charge related to its pharmacy-services segment. When taking out one time items, adjusted losses came in at 63 cents a share. Analysts surveyed by FactSet had been expecting an adjusted per-share loss of 50 cents.

Earlier this year, the chain closed stores in New York's Hell's Kitchen neighborhood and another on Manhattan's Upper West Side.

In January, a New York Post reporter spotted a brazen shoplifting incident at the Hell’s Kitchen location, where "store sources" told the outlet people have stolen over $200,000 in store goods over a couple of months. 

Rite Aid President and CEO Heyward Donigan  (Getty / iStock)

At the Upper West Side location, actor and comedian Michael Rapaport said he was at the store in January when he watched a man load two bags full of allegedly stolen goods. Rapaport captured video footage that showed the alleged thief passing a store security guard as he waltzed out the front doors holding the bags of loot.

A Rite Aid spokesperson previously told FOX Business that the stores are closing "for a number of reasons" based on months-long reviews that were carried out "across the full footprint of 2,500 stores." 

In all, the store closing plan meant the shutting of 63 stores nationwide, roughly 2% of the total number of Rite Aid locations.

Persaud added that the retailer is making progress in thwarting thieves.

Ticker	Security	Last	Change	Change %
RAD	RITE AID CORP.	5.05	-2.00	-28.37%
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"Over the last 24 months, the team has done incredible work on improving our product protection, improving our organized retail client program" he noted.

Still, stealing is complicating the inflationary environment as well the retailer warned.

"We experienced unexpected headwinds this quarter from front-end shrink, particularly in our New York urban stores. Given the current economic environment, we expect to see a cautious consumer in the back half of the year" said CEO Heyward Donigan.

https://www.foxbusiness.com/markets/rite-aid-exec-impossible-to-stop-nyc-store-thefts