Business
The Inland Empire's once-unstoppable warehousing industry falls into a slump
![The Inland Empire's once-unstoppable warehousing industry falls into a slump The Inland Empire's once-unstoppable warehousing industry falls into a slump](https://ca-times.brightspotcdn.com/dims4/default/a06b203/2147483647/strip/true/crop/7888x4141+0+559/resize/1200x630!/quality/75/?url=https%3A%2F%2Fcalifornia-times-brightspot.s3.amazonaws.com%2Fd2%2F96%2F110b8be34cd78d867da98ff82b36%2F1410953-fi-0216-ie-economy-mauricio-perez-003-ik.jpg)
For years the growth of warehousing in the Inland Empire was relentless. At the confluence of port-bound freeways and rail spurs along the eastern edge of Los Angeles’ sprawl, box-like fulfillment centers popped up in business parks by the millions of square feet. They were an economic engine, a bringer of jobs, a shortener of commutes, and a workhorse during the pandemic.
But now that’s come to a halt — bringing uncertainty for thousands of workers and an industry that has been an economic bellwether for the region.
After the COVID-19 pandemic slammed the nation in spring 2020, the Inland Empire recovered all of the jobs it lost by the summer of 2021 — more than a year ahead of Orange County and almost two years earlier than Los Angeles County. Despite pandemic restrictions, the area’s machinery of storing and transporting goods kicked into high gear, outpacing better-paying and more glamorous sectors in the state, such as entertainment and tech.
But the tables have turned in the last year. Warehousing and storage jobs in the Inland Empire shrank for the first time in more than two decades. Once-booming truck transportation has been down since early in the summer, and the area’s wholesale trade employment is dropping fast, according to year-over-year data from the U.S. Bureau of Labor Statistics. Industrial building vacancies are up and rents are down.
Logistics businesses nationally are cutting back amid declines in freight volume. United Parcel Service said it would shed 12,000 jobs worldwide over the next several months after more than a $9-billion drop in revenue last year. A company spokesman said it didn’t have a breakdown of where those layoffs would hit, but UPS employs tens of thousands of workers in California.
“Everything is different,” said Victor Ramirez, a Pomona resident who’s worked in warehousing for about 20 years. Speaking in Spanish, he remembered when times were better — much better.
The 59-year-old recalled not only getting full 40-hour workweeks in the past but bonuses during the pandemic. These days, things have slowed so much at his current place of employment, a warehouse that builds pallets, that he has taken on additional work as an Uber driver and canvasser for nonprofits.
“One job isn’t nearly enough,” Ramirez said.
With related business services and real estate also down, the Inland Empire’s overall job growth last year averaged just 1.2%, about half the rate for Southern California and the state as a whole. “We could be the weak link,” said John Husing, the region’s longtime economist based in Redlands.
The pandemic-induced surge of consumer purchases, transportation gridlock and prolonged labor negotiations at the ports all played a role in disrupting the flow of goods and exacerbating an oversupply of warehouses. But even before COVID, the industry was feeling increasing strains from environmental regulations, disputes over independent trucking and rising operating costs that have pushed more businesses to leave the state.
The Inland Empire’s troubles come as the U.S. economy faces an expected slowdown and the tech sector continues to shed jobs. California’s tourism industry, another big economic engine, hasn’t fully recovered, and high interest rates have taken a bite out of the housing market. All of that has left the state trailing the nation in job growth. The latest unemployment rate statewide, as well as for the Inland Empire, was 5.1% in December, well above the U.S. figure of 3.7%.
“Right now I am not an optimist on this economy,” Husing said.
The long shadow of logistics
Thanks to lower housing costs than in Los Angeles and Orange counties, the Inland Empire’s population has been growing for decades. Over the years, many residents found work in a logistics industry that has surged along with the region. Since 2000, the Inland Empire’s population has increased by 45% to 4.7 million last year. And jobs during that period have jumped even faster, up 68% to 1.7 million. That’s about as many as in all of Orange County.
A lot of that came on the back of the logistics industry, which got a big boost from soaring trade with China. Today, about 40% of all containers entering the U.S. from Asia are handled by the ports of L.A. and Long Beach. More than 37,000 heavy and tractor-trailer truck drivers based in the Inland Empire haul that cargo to rails and some 4,000 warehouses that are scattered across Riverside and San Bernardino counties’ 27,000 square miles, double the land area of the next largest metropolitan area, Phoenix-Scottsdale in Arizona.
The growing number of jobs brought the promise of greater economic security and quality of life as more residents were able to get jobs closer to home. But the growth of the logistics industry has exacerbated environmental concerns in communities with some of the least-healthful air in the United States. And analysts say too many households in the area are struggling to make ends meet as earnings have not kept up with rising costs.
Sheheryar Kaoosji, executive director of the nonprofit advocacy group Warehouse Worker Resource Center in Ontario, said many logistics jobs are still too close to minimum wage, are temporary or seasonal and are often quick to disappear when the economy softens.
“The average worker is always in a position of uncertainty,” he said.
For all occupations, Inland Empire workers made $27.96 an hour on average in 2022, the latest according to the Bureau of Labor Statistics. That is compared with $33.43 for L.A. and Orange counties combined, and $45.37 for the San Francisco Bay Area.
More than 270,000 people in the Inland Empire work in transportation and material moving occupations. Their median hourly pay in 2022: $21.13. Stockers and order fillers made even less — $19.01 an hour, on average.
California’s statewide minimum wage for larger employers was $15 an hour in 2022. It went up to $16 this year, and for fast-food workers it’ll go to $20 an hour in April.
“It’s a good starter job, but as far as long-term, a lot of people think they’re going to do it for life,” said Byron Williams, 48, of Moreno Valley, referring to logistics jobs at Amazon.
Williams once worked at Amazon, though on the finance side of logistics. The e-commerce behemoth operates more than a dozen distribution facilities in the Inland Empire. Williams said he left because of the pay. “It’s not a for-life position.”
The new boom and bust
Going through boom and bust cycles has been part and parcel of life in the Inland Empire. The area tumbled during the early 1990s downturn that was marked by defense cuts and overbuilding. And it was one of the hardest hit by the subprime mortgage crisis that brought the Great Recession in 2007-09.
The pandemic, at first, seemed to be an exception. The Inland Empire’s economy quickly rebounded thanks to surging orders for all kinds of stuff from people stuck in their homes. Rounds of government stimulus checks added fuel to consumer spending.
But in the last year the industry suddenly fell back, in part as consumer spending shifted more to services, such as travel and entertainment , and less on things such as cars and groceries. High inflation also was a factor, as was the unusual situation at the ports.
Early in the pandemic, dozens of ships were lined up at sea waiting to berth in L.A. and Long Beach ports. When the logjam eased, merchandise flooded into the region, prompting wholesalers and distributors to double down on warehouses and workers.
“We couldn’t hire fast enough,” said Jeff Baldassari, who until August was president of U.S. Rubber Recycling in Colton, which got a burst of pandemic orders of rubber mats for in-home gyms and other uses. “Now the party ended, and it’s the hangover the next day,” he said.
Drawn-out labor talks with longshoremen that lasted more than a year prompted some companies to divert cargo to the East and Gulf Coast ports.
In the last few months, warehouses and distribution centers have shut down in Rialto, Fontana, Jurupa Valley, Perris and Chino, among other cities, according to WARN Act filings with the state. During the summer, the bankrupt trucking firm Yellow Corp. shuttered several terminals in the Inland Empire that eliminated about 1,000 jobs.
The downturn in logistics has spread to other industries too, including finance and real estate. San Francisco-based Prologis, the world’s biggest warehouse developer and a major player in the Inland Empire, reported a 7% drop in rents in the fourth quarter for Southern California. The company said its construction pipeline in the region was half of what it was at year-end 2022.
During a recent conference call with analysts, Prologis’ chief executive, Hamid Moghadam, said it’s always been difficult for retailers and wholesalers to correctly forecast demand and manage inventories. “They’re schizophrenic. They always have too much or too little. You can never get it right.”
Still, he and other developers said they are bullish on the future. The logistics business in Southern California is getting back on its feet after the pandemic, they said. And key drivers of growth remain intact — e-commerce, global trade, demand for larger, more efficient distribution centers, said Iddo Benzeevi, chief executive of Highland Fairview, a developer working on a massive logistics center in Moreno Valley.
But that will also bring more consolidation, he said. Older, smaller facilities will get phased out, and payrolls aren’t likely to grow as fast as before. In the long term, logistics jobs may require higher skills and pay better as facilities become more automated and employ technologies such as driverless trucks — but they could employ fewer workers.
![A UPS truck driver stands in front of his truck](https://ca-times.brightspotcdn.com/dims4/default/7999f26/2147483647/strip/true/crop/7831x5220+0+0/resize/1200x800!/quality/75/?url=https%3A%2F%2Fcalifornia-times-brightspot.s3.amazonaws.com%2F0c%2Fc8%2F20764ae24cf2a92baff261f21c1e%2F1410953-fi-0216-ie-economy-mauricio-perez-004-ik.jpg)
Mauricio Perez, 33, a UPS truck driver who has been at the company for 15 years. (Irfan Khan / Los Angeles Times)
(Irfan Khan/Los Angeles Times)
For truck driver Mauricio Perez, a 15-year veteran at UPS who lives in Rancho Cucamonga, it’s the near term that worries him.
Work usually slows after the busy Christmas season, but he said this year looks different. During the holidays, Perez saw 53-foot trailers stacked to the brim with items and packages to be delivered. Nowadays, 28-foot trailers have barely two or three pallets inside.
What’s more, he said that the work-bidding process at UPS suggests that a lot more truckers in the Inland Empire are likely to be on a more flexible schedule that can vary week to week or shunted to the package hub, where they’d work fewer hours. That means drivers who don’t get assigned work may end up taking a “layoff week,” in which they won’t get paid unless they cash out vacation time or accrue pension benefits.
“It’s not looking like the economy is going to get any better in the next few months,” Perez said. “We just gotta brace ourselves for the worst.”
![](https://newspub.live/wp-content/uploads/2022/03/np-logo.png)
Business
In College Sports’ Big Money Era, Here’s Where the Dollars Go
![In College Sports’ Big Money Era, Here’s Where the Dollars Go In College Sports’ Big Money Era, Here’s Where the Dollars Go](https://static01.nyt.com/images/2024/08/22/multimedia/2024-05-15-nil-compensation-index/2024-05-15-nil-compensation-index-facebookJumbo.png)
What wins college football championships? A potent defense? An explosive offense? In the era of name, image and likeness, it is money.
Lots of it.
It can cost as much as $10.5 million for a title-contending starting offense and defense in the new Power Four conferences. The big-ticket item, of course, lines up behind the center.
A blue-chip quarterback in a Power Four conference — schools like Alabama, Michigan and Washington — can expect to earn hundreds of thousands of dollars annually through name, image and likeness, or N.I.L., deals. A quarterback in the Southeastern Conference can bring in more than $1 million, on average.
Expected annual compensation for starting players in the Power Four conferences by position Source: Opendorse. Data is based on N.I.L. transactions disclosed through or processed by Opendorse between July 1, 2021, and June 30, 2024.
Note: To be included in the calculations players’ earnings must rank in the top 25 at their position. Specialist ($60,000) and Tight End ($140,000) positions are not labeled.
How much top-earning football players make in a year
And that is merely an average. Ask the Texas Longhorns.
Quinn Ewers
$1.7 million
Texas
Their starter, Quinn Ewers, has N.I.L. deals worth nearly $2 million annually, according to the website On3, which tracks deals for college athletes.
Arch Manning
$3.1 million
Texas
Arch Manning, his backup who hails from one of football’s royal families, has deals worth more than $3 million.
Carson Beck
$1.4 million
Georgia
Georgia’s quarterback, Carson Beck, brings in enough that he recently bought a Lamborghini that retails for $270,000.
Between the cash pouring into athletic programs via collectives — a fancy name for boosters who funnel much of the N.I.L. money to players — and more lenient transfer rules, a sort of eBay to buy athletes has been created, transforming how powerhouse teams are built.
“It’s whoever wants to pay, the most money raised, the most money to buy the most players, is going to have the best opportunity to win,” Nick Saban, the recently retired football coach at the University of Alabama, told Congress in March.
But how do athletes, coaches and administrators determine the going rates? Many consult the Black Book, a kind of Zillow for college sports, which details an athlete’s expected annual earnings, and, in the case of sports like football and men’s and women’s basketball, even breaking them down by position and conference.
A series of three proportional area charts related to the N.I.L market. The first square shows the overall size of the N.I.L. market, the second shows that 80 percent of the market is made up by donor groups known as collectives and the third shows that only 30 percent of the market is publicly disclosed.
Opendorse, the company behind the Black Book, projects around $1.7 billion in transactions in the N.I.L. market this year.
Of that, 80 percent will come through collectives like Texas’ Team One Foundation and the Classic City Collective at the University of Georgia. But even that is an incomplete picture of a rapidly changing N.I.L. frontier awash with money.
There is no universal requirement for athletes to disclose how much they are being paid. Less than a third of the money that student athletes are making is publicly known, according to Opendorse.
Still, the Black Book is a must have for university collectives and collegiate athletic officials, as well as the lawyers involved in House v. N.C.A.A., an antitrust case in which the Black Book and all Opendorse data from 2016 through 2022 were subpoenaed. The sides recently agreed to a $2.8 billion settlement.
If a federal judge approves it, schools will be allowed to set aside around $20 million per year, beginning in the fall of 2025, to pay athletes. (The proposal also calls for a program by which athletes’ N.I.L. deals could be reviewed.)
The Black Book, copies of which were obtained by The New York Times, shows that, even as football remains the dominant sport financially, sports like women’s basketball have become increasingly lucrative. In her final season at the University of Iowa, Caitlin Clark sold out arenas, increased television ratings and had sponsorship deals valued at $3 million.
Clark may have been the sport’s unicorn, but title-contending programs are expected to spend more than $730,000 on their starting five, with guards being the most valued at $225,000.
The N.I.L. era has also created a new generation of entrepreneurs and given them a more concrete sense of their earning potential. For instance, Alex Glover, a star volleyball player who recently concluded her career at Southern Methodist University, made more than $100,000 from sponsors who wanted to be associated with her Instagram video series, called “Day-In-The-Life of a D1 Volleyballer.”
Livvy Dunne
$3.9 million
L.S.U.
Olivia Dunne, a gymnast at Louisiana State University, has become something of a celebrity in recent years. Dunne, who goes by Livvy, has leveraged a large social media following — she has over five million followers on Instagram — to notch deals with major brands like Nautica and Vuori.
Paige Bueckers
$1.4 million
Connecticut
Paige Bueckers, a standout basketball star at the University of Connecticut, similarly has millions of followers on social media and has signed N.I.L. deals with Nike, Gatorade and Verizon.
The top N.I.L. earners in women’s gymnastics usually make around $20,000 annually, about 10 times as much as their male counterparts, according to data from Opendorse. Besides the major men’s sports — football, basketball and baseball — collegiate female athletes typically earn more than male athletes in the same sport.
Expected annual compensation in select Olympic sports
Source: Opendorse. Data is based on N.I.L. transactions disclosed through or processed by Opendorse between July 1, 2021, and June 30, 2024.
Note: To be included in the calculations, players’ expected annual earnings must rank in at least the top 50 at their position. The Track/Cross Country category includes athletes in track and field.How men’s and women’s annual earnings compare in smaller sports
“By nature, athletes are disciplined and purpose-driven,” said Blake Lawrence, the co-founder of Opendorse. “What has been really cool to see is how many athletes on our platform, especially the women, lean into the opportunities to be creative and build a brand. They don’t want to get paid just for going to practice and games.”
Lawrence, a former starting linebacker at the University of Nebraska, began Opendorse in 2012 to help his former teammate Prince Amukamara monetize his brand after he entered the N.F.L. as a first-round draft pick with the New York Giants. Lawrence understood the commitment required of college athletes and anticipated that the pay-to-play model was coming sooner rather than later. More than a decade on, some 150,000 athletes have used his platform to grow their name, image and likeness revenues.
The company compiles its numbers based on previous N.I.L. marketing deals signed by a large cross section of football and basketball players and competitors in the so-called nonrevenue Olympic sports. Clients that pay for the information include university athletic departments, their collectives and athlete agencies.
“I know what it takes to be an athlete and wanted to create something like Expedia or Zillow that took the mystery out of getting good value and putting that power in the hands of athletes,” said Lawrence, who offers tutorials on topics like marketing and pay benchmarks on his Instagram feed. “This is all new to them. I see six contracts a second and want them armed with information to make what could be life-changing decisions.”
Like the American economy, college sports have a hierarchy, and its “1 percenters” are the so-called Power conferences like the SEC and the Big Ten.
Expected annual compensation for starting players in each conference by position
Source: Opendorse. Data is based on N.I.L. transactions disclosed through or processed by Opendorse between July 1, 2021, and June 30, 2024.
Note: To be included in the calculations players’ earnings must rank in the top 10 at their position.How the Power Four conferences compare
The expected annual N.I.L. compensation for a top-10-earning football player at any position is $216,000 for the Big Ten and $565,000 in the SEC, which is more than three times the annual earnings of $159,000 in the Big 12.
The SEC’s stature is even more pronounced this year. The former Big 12 powerhouses Texas and Oklahoma have joined the conference, which is made up of state universities that have long taken football seriously and invested heavily in athletics. The top-10-earning SEC players at every position — except for tight ends and specialists — earn more annually on average than players in any other Power Four conference. A running back in the SEC can now expect to make about half a million dollars, almost as much as a Big 12 quarterback. Offensive and defensive linemen in the SEC do even better, tallying upward of $700,000.
For the smaller, so-called Group of Five conferences, which include Conference USA and the Mountain West, the new N.I.L. environment puts football championships even further out of reach. The average value of top 25 players at any position at schools such as Liberty (part of Conference USA) or Boise State (in the Mountain West) is just under $50,000.
The money is lucrative in the top tier of men’s and women’s basketball, as well: A starting five of top-25-earning men’s basketball players costs about $3.3 million, with forwards on the top of the pay scale making around $750,000. And while women’s basketball earnings are comparatively much lower, top-level women’s players have had substantial growth since last year, with pay across all positions up by $30,000.
How much top-earning basketball players make
Expected annual compensation for players, on average, by position
Source: Opendorse. Data is based on N.I.L. transactions disclosed through or processed by Opendorse between July 1, 2021, and June 30, 2024.
Note: To be included in the calculations players’ earnings must rank in the top 25 at their position.
Even better for basketball stars? With their faces and personalities in full view during games, it is easier for them to enhance revenues beyond collective money through sponsorship partnerships with national brands.
This new market allowed Armando Bacot, who played at the University of North Carolina, to remain in college last season and begin work on a master’s degree in business. His partnerships with the Opendorse clients Dunkin and Kellogg’s Frosted Flakes, as well as others with regional and local companies, have made him a multimillionaire.
Many star players like Bacot are now forgoing the ritual of leaving school after just a year or two to enter the N.B.A. Instead of jumping (ready or not) into the draft in search of riches, more players are choosing the ample N.I.L. pay and more time to work on their games and degrees. (Bacot went undrafted and signed with the Utah Jazz this summer.)
“With more and more veteran guys staying in school longer, it’s going to be harder and harder for freshmen to get big minutes, because coaches would rather have veterans,” said Daniel Hennes, the chief executive of Engage, which represents college basketball stars like Bacot in N.I.L. deals. “So, underclassmen will stay in school longer, and the draft will get older and older. In a lot of ways, that’s good for everyone.”
Mike Boynton is among the many college coaches who are not so sure. He brought the future N.B.A. star Cade Cunningham to Oklahoma State with four years of shoe leather. He outworked more accomplished rivals with national titles on their résumés with the promise of doing right by the young star.
“I can’t work that hard anymore,” said Boynton, now an assistant at the University of Michigan. “Not when you can say, ‘Hey, here’s $500,000 to come spend nine months over here.’”
Source: Opendorse. Data is based on N.I.L. transactions disclosed through or processed by Opendorse between July 1, 2021, and June 30, 2024.
Note: To be included in the calculations, players’ expected annual earnings must rank in the top 25 at their position. The Track/Cross Country category includes athletes in track and field.Big sports still pay big money …
… but athletes in the so-called nonrevenue sports are finding increased earnings, too.
For many athletes — those who aren’t top stars in the marquee sports — the N.I.L. era is different, though no less exciting. Zoe Ledet, a 19-year-old sprinter at West Virginia State University, joined TikTok in 2020, at the height of Covid-era teenage boredom. She said she quickly amassed a following for “funny skits, hair care, you know, relatable stuff” and now has 1.7 million followers on the platform and nearly 300,000 on Instagram. Still, Ledet never thought brands would be interested in working with her as an athlete.
“I knew that big track athletes like Sha’Carri could get deals with Nike, but I didn’t know there were smaller deals to be had,” said Ledet, referring to the Olympic sprinter Sha’Carri Richardson.
West Virginia State
Last year, during her freshman season, Ledet was approached by B.E. Collective+, an organization that supports student athletes from historically Black colleges and universities in the N.I.L. market. She signed with the group and had N.I.L. deals worth about $3,500 in her first year.Zoe Ledet
$3,500
For Ledet, those earnings aren’t life-changing money, but she has been able to use platforms like the BE Collective+ and Opendorse to gain a better sense of her value in the new marketplace. Her followers now ask her to post more about track and to share videos from meets, content that she hopes will in turn lead to more N.I.L. deals.
“There are a lot of athletes bigger than me, of course, but N.I.L. has allowed athletes like me to widen our platform and get more recognition, too,” she said.
Source: Opendorse. Data is based on N.I.L. transactions disclosed through or processed by Opendorse between July 1, 2021, and June 30, 2024.
Note: To be included in the calculations, players’ expected annual earnings must rank in at least the top 50 at their position. The Track/Cross Country category includes athletes in track and field.
Look up expected annual N.I.L. earnings by sport
Sport
Position
Div.
Expected annual earnings
Football Football
Quarterback
SEC
$1,043,252
Football Football
Quarterback
Power 4
$819,020
Football Football
Offensive line
SEC
$779,288
Football Football
Defensive line
SEC
$756,497
M. Basketball Men’s basketball
Forward
NCAA DI
$749,201
Football Football
Wide receiver
SEC
$705,554
M. Basketball Men’s basketball
Guard
NCAA DI
$636,472
M. Basketball Men’s basketball
All
NCAA DI
$630,796
Football Football
Wide receiver
Power 4
$614,561
Football Football
Linebacker
SEC
$584,629
Business
'My kids go to Costco now,' and other reasons Rite Aid, Walgreens and CVS are hurting
!['My kids go to Costco now,' and other reasons Rite Aid, Walgreens and CVS are hurting 'My kids go to Costco now,' and other reasons Rite Aid, Walgreens and CVS are hurting](https://ca-times.brightspotcdn.com/dims4/default/3624e1b/2147483647/strip/true/crop/3899x2047+0+276/resize/1200x630!/quality/75/?url=https%3A%2F%2Fcalifornia-times-brightspot.s3.amazonaws.com%2F4d%2Fad%2F0a80891a4077b6c7d49f86040823%2F1473696-la-fi-chain-pharmacies-look-to-cut-costs-close-locations-mdb-03.jpg)
These are tough days for pharmacy chains.
From Gardena to Venice to Koreatown, storefronts that used to be Rite Aid drugstores sit empty. On Lincoln Boulevard, the outline of the Rite Aid logo can still be seen above shuttered doors.
The retail pharmacy chain has closed more than 200 stores since filing for Chapter 11 bankruptcy protection in 2023 and announced plans in July to shut down 18 more locations in California as it struggles to deal with creditors and lawsuits over opioid prescriptions.
Competitors CVS and Walgreens are also cutting costs and closing stores, reflecting challenges in the industry that have been brewing for years but have recently begun to accelerate, experts say. In June, Walgreens’ chief executive said about a quarter of the company’s 8,600 U.S. stores were underperforming and that a “significant number” of them could be closed.
Walgreens, CVS and Rite Aid are not in identical financial positions, but all three are being forced to examine their footprint and business model as they deal with lowering margins and changing consumer trends.
“Between the pressure on the front of the store plus the pressure on the pharmacy, it’s just getting harder and harder for these guys to operate,” said Brian Tanquilut, an industry analyst at Jefferies.
On the retail side, chain pharmacies are facing heavy competition from giants such as Amazon and Walmart, a drop in consumer spending and an increase in theft that can eat into profits, analysts said. On the pharmaceutical side, they’re seeing lower margins because of lower reimbursement rates for the drugs they provide to customers.
Much of the pharmacy pinch is rooted in the companies’ dependence on intermediaries called pharmacy benefit managers, or PBMs, who have significant control over how much pharmacies get reimbursed for the drugs they sell to customers.
Two of the largest benefit management companies, OptumRX and Caremark, are owned by insurance companies that have been looking to cut costs by pushing down reimbursement rates, which has punished the pharmacies’ bottom lines.
“The PBMs, all of which now are owned by the insurance companies, have been squeezing what they pay for drugs,” Tanquilut said. “As that has continued to come down, the profitability of these pharmacies has also waned,” he said.
Overall, the three pharmacy chains have struggled on Wall Street this year.
Walgreens stock price, which closed Friday at $9.25, has plummeted more than 65% since the start of the year. In June, when it missed earnings expectations for the quarter, the company warned investors it was bracing for more gloomy performance figures and cut its financial forecast for the fiscal year that ended in August.
A man rides his bike by Walgreens on Friday, Aug. 30, 2024 in Venice.
(Michael Blackshire / Los Angeles Times)
Rite Aid’s languishing stock, meanwhile, took a nosedive when the company entered bankruptcy late last year and the New York Stock Exchange moved to delist it.
CVS stands on slightly more solid ground, said Raymond James healthcare analyst John Ransom, because it owns insurance company Aetna, as well as Caremark, the pharmacy benefit manager.
“CVS is an integrated company,” Ransom said. “They’ve been able to integrate Caremark into the drug retail business in a way that’s made the drug retail business more healthy.”
But that has not made the company immune to market forces. Its stock, which closed at $57.24 Friday, is down 29% this year. CVS slashed its financial outlook and embarked on a $2-billion cost-cutting plan in early August. The company has also been closing locations since 2021, when it announced a realignment plan that would close 900 stores over three years.
CVS is on track to finish its store closures by the end of this year. After the closures, 85% of U.S. residents will still live within 10 miles of a CVS, said Amy Thibault, lead director of external communications for the company.
![A woman walks by a CVS/Pharmacy.](https://ca-times.brightspotcdn.com/dims4/default/4e49a12/2147483647/strip/true/crop/4538x2877+0+0/resize/1200x761!/quality/75/?url=https%3A%2F%2Fcalifornia-times-brightspot.s3.amazonaws.com%2F05%2F69%2F5ceb2c2047f485473e95c99feafe%2F1473696-la-fi-chain-pharmacies-look-to-cut-costs-close-locations-mdb-06.jpg)
A woman walks by a CVS/Pharmacy on Friday, Aug. 30, 2024 in Venice.
(Michael Blackshire / Los Angeles Times)
“The store closure decisions are based on population shifts, consumer buying patterns, a community’s store density, maintaining access to pharmacy services, and future health needs to ensure we have the right kinds of stores in the right locations for consumers,” she said.
There is an overcrowding of drugstores in the country partly as a result of a real estate binge in the ‘90s, Ransom said.
“They’re shutting these stores down in urban markets where you go to a street corner and you see four pharmacies,” he said. “I think part of it is they did it to themselves.”
Walgreens external communications manager Samantha Stansberry said the company is being affected by increased regulatory and reimbursement pressures as well as higher levels of inflation, theft and other types of losses.
“Like most retailers, we have been facing a challenging operating environment,” Stansberry said. “These factors have resulted in a growing number of store closures across the country as we invest in our other locations to deliver a consistent customer experience.”
Walgreens was poised to acquire Rite Aid in a merger in 2015, but the deal ultimately fell through.
Koreatown resident Darleen Stoker was recently shopping at a Rite Aid on Larchmont Boulevard in Hancock Park and noticed rows of empty shelves. She wondered if it was a sign that the location was closing, she said.
“My kids go to Costco now,” Stoker said. “Rite Aid is more for when you realize last minute you need nail polish.”
Other customers in the store said the shelves have been empty for at least two months.
Rite Aid did not respond to multiple requests for comment.
“The remaining Rite Aid stores face a lot of the challenges that they were facing when they were trying to bridge with Walgreens,” Tanquilut said. “It’s a lot of pressure from other retailers, whether that’s the dollar stores, the Walmarts, the Targets of the world, or online retail like Amazon.”
Retail pharmacies are also struggling to adapt to a changing consumer more focused than ever on value, Tanquilut said. Customers have started to realize that sodas cost less at a grocery store than a drugstore, he said.
As inflation drives everyday costs up, consumers are tightening their belts and may be limiting impulse purchases on items found at a drugstore such as snacks and beauty products. A significant portion of purchases at drugstores are spontaneous, Tanquilut said, as customers roam around waiting for their prescription.
Tanquilut said the closing of locations could help CVS, Walgreens and Rite Aid weather the harsh industry conditions that have prompted cost-cutting measures. The density of pharmacies in the country is higher than it needs to be, he said.
“We are ‘over-pharmacied’ as a society,” Tanquilut said. “From a profitability perspective and from a competition perspective, reducing the number of retail pharmacies is not a bad thing.”
Business
How high are the prices for a Shohei Ohtani, Decoy bobblehead? A seller wants it to fetch $69,420
![How high are the prices for a Shohei Ohtani, Decoy bobblehead? A seller wants it to fetch ,420 How high are the prices for a Shohei Ohtani, Decoy bobblehead? A seller wants it to fetch ,420](https://ca-times.brightspotcdn.com/dims4/default/91b2c56/2147483647/strip/true/crop/5282x2773+0+450/resize/1200x630!/quality/75/?url=https%3A%2F%2Fcalifornia-times-brightspot.s3.amazonaws.com%2F5a%2F4d%2Ff79d730b49eead3aa6450d263e42%2F1472838-sp-0828-dodgers-orioles-wjs004.jpg)
The Shohei Ohtani bobblehead doll, with the Japanese star holding his dog, Dekopin, was free when the Dodgers handed it out to fans with tickets — and those persistent enough to line up for hours outside Dodger Stadium before Wednesday night’s game.
Now, if you want to get one, you better get ready to dig deep into your wallet.
The sought-after bobblehead dolls are currently selling for hundreds of dollars online, just two days after the Dodgers’ giveaway.
“I kind of cringe, as a dealer, at how much some of this stuff is going to cost,” said Matt Federgreen, owner of Beverly Hills Card Shop, who has dealt with sports collectibles since 1983.
A total of 40,000 bobbleheads were given away before the game against the Baltimore Orioles, but more than 53,000 tickets were sold. Unless fans arrived at the stadium early, they were out of luck.
The Shohei Ohtani and Decoy bobblehead doll is listed online from $150 to $69,420.
(Los Angeles Dodgers)
Fans did get to see Ohtani’s dog, whose nickname is “Decoy,” throw out the first pitch.
To get the in-demand collector’s item now, people are paying anywhere between $150 to more than $1,500, according to listings and bids found on eBay and Facebook’s Marketplace.
The Dodgers also gave away a limited gold-colored Ohtani bobblehead, which is selling for hundreds of dollars more.
One listing for the gold-colored Ohtani on eBay asked for a tongue-in-cheek amount of $69,420, but it had no bids as of Friday afternoon.
Ohtani’s international popularity has sent prices soaring for some of his memorabilia. Some of the gold-colored bobbleheads have already sold online for $1,500 or more.
“Everything Ohtani that comes out right now, there’s profit to be made and people are going to jump on that,” Federgreen said.
One listing on eBay was selling the Ohtani and Decoy bobblehead for $169.50 on Friday afternoon, while another asked for $227.77. One seller has sold more than 30 dolls.
Another posting, on Facebook’s Marketplace, asked for $150 for the doll, but noted the box had been opened.
But listings for the gold doll, or for both of them, were found for more than $1,000.
One person in Anaheim, in a Facebook post, asked for $1,600 for the gold doll. Another, for both dolls, asked for $1,000, and included a picture of the dolls with Dodger Stadium in the background to add a bit more authenticity.
The Times reached out to several people who were selling the dolls online but did not immediately hear back from sellers.
Some postings asked for more than $2,000 but, as Federgreen noted, showed no signs that someone had bid or paid that price.
The Dodgers gave away another Ohtani bobblehead in May, five months after he signed a 10-year, $500-million deal. Fans also stood in line a good three hours before that game to make sure they got one.
For Federgreen, he said Ohtani is one of the reasons why his business has been doing so well recently.
Trading cards and memorabilia have seen increased popularity in recent years, he said, and stars such as Ohtani have helped.
On Thursday Topps, which is owned by Fanatics Collectibles, announced it was partnering with Ohtani in an exclusive trading card deal that will include cards, autographs and game memorabilia.
Details of how much the deal is worth weren’t released, Fanatics said it was a long-term agreement.
For Federgreen, he understands the demand for the Ohtani doll, but issues a mild warning for people willing to drop a few hundred bucks for it.
“There’s a lot of profiteering going on,” he said. “I don’t mess with stuff with things that are maybe short-term value.”
He notes that some collecting items that suddenly spike up in price will often dip down just as fast.
“It’s a cute bobblehead,” he said. “But you can buy something vintage for the same amount of money that retains value.”
-
Connecticut1 week ago
Oxford church provides sanctuary during Sunday's damaging storm
-
Technology1 week ago
Breakthrough robo-glove gives you superhuman grip
-
Politics1 week ago
Clinton lauds Biden as modern-day George Washington and president who 'healed our sick' in DNC speech
-
Politics1 week ago
2024 showdown: What happens next in the Kamala Harris-Donald Trump face-off
-
News1 week ago
Who Are Kamala Harris’s 1.5 Million New Donors?
-
Politics1 week ago
Trump taunted over speculated RFK Jr endorsement: 'Weird as hell'
-
Politics1 week ago
Vivek Ramaswamy sounds off on potential RFK Jr. role in a Trump administration
-
World6 days ago
Portugal coast hit by 5.3 magnitude earthquake