Rite Aid, after filing for bankruptcy protection twice in less than two years, has shut down many more of its stores. The New Jersey Bankruptcy Court granted approval earlier this month, allowing the chain to close 114 additional locations while moving forward with plans to sell its assets as part of the latest bankruptcy process.
The closures are happening across multiple states, including Pennsylvania, California, New York, New Jersey, Connecticut, Delaware, New Hampshire, Idaho, and Ohio, as outlined in filings from the District of New Jersey. Notably, Pennsylvania is seeing the bulk of these closures.
The pharmacy chain initiated its Chapter 11 filing in May, a mere eight months after it had ended its first bankruptcy protection.
Compounded by hundreds of lawsuits related to the opioid crisis, Rite Aid’s financial struggles have significantly increased its debt, prompting the protection filing in 2023. Following that, the company launched a store optimization strategy, leading to an immediate closure of 154 of its 2,284 stores.
During its restructuring, Rite Aid continued to shutter hundreds of locations, eventually leaving about 1,245 stores operational by the time it filed for bankruptcy again.
While the initial restructuring did help decrease the chain’s debt, expectations were that if it emerged as a private entity owned by creditors in 2024, it would still be burdened with around $2.5 billion in debt.
The company has also struggled to tackle ongoing challenges like inflation and increasing competition from other pharmacy chains such as Walgreens, CVS, Walmart, and even Amazon.
George Hill, a managing director and equity research analyst at Deutsche Bank, pointed out to Fox Business that the recent industry-wide store closures haven’t been unexpected by experts. He remarked, “The industry seemed to be growing faster than the need for pharmacies was increasing,” highlighting possible company-specific issues in financial management and growth strategies.
The number of store closures by state is as follows:
Pennsylvania – 42
California – 27
New York – 13
New Jersey – 11
Maryland – 2
Washington – 7
Delaware – 3
Connecticut – 2
Vermont – 2
New Hampshire – 1
Idaho – 1
Ohio – 1
