Duane Reade "at Significant Risk of Default"?

In the Wall Street Journal's article about expected post-holiday bankruptcy filings from retailers, ubiquitous NYC drug (and lots of other stuff) store Duane Reade might be on that list! "According to Standard & Poor's, nine U.S. retailers and restaurants, including off-price apparel chain Loehmann's Holdings Inc., drugstore operator Duane Reade Holdings Inc. and jeweler Finlay Enterprises Inc. are at significant risk of default, with junk-bond ratings of CCC, or 'very weak.'" But a DR spokesman told the WSJ the chain is "a vibrant and viable retail operation, and any suggestion to the contrary is inaccurate." He also cited "positive trends" at 1+ year old stores, pointed to nearly $70 million in available credit and said there were "no liquidity issues." A 2005 New York magazine article had noted that in 2004, "the company’s profit margin hovered around 1 percent, about a third of what national chains take home," which is good for New York but nothing to copy.

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By Jen Chung in News on January 12, 2009 8:58 AM

Comments [rss]

NannyState

Maybe they overspent signing new leases on every square inch of NY. I hope they go under so life can return to the city.

Spirit of 76

Shouldn't Gothamist be using the new, hideous white-on-black DR logo?

angry_pickle

i don't think that $5 back for every hundred you spend is a good deal at all

I totally agree. Not only that but the offer expires like within 1 or 2 weeks!

Nyctini11

Duane Reade is such a rip off compared to the other "drug stores" we have here in NY, it amazes how much money people spend there. I stopped shopping with them once and for all over a year ago because we have a rite aid, cvs & walgreens all with in a few blocks of each other and Duane Reade is the only one of them to basically never offer any kind of consumer savings & i don't think that $5 back for every hundred you spend is a good deal at all.