This is the second bankruptcy filing for the pharmacy chain in the last few years.
WASHINGTON — Pharmacy chain Rite Aid filed for another Chapter 11 bankruptcy protection on Monday.
Rite Aid cited ongoing financial difficulties, intensified by “rapidly evolving retail and healthcare landscapes,” as the reason for filing for bankruptcy protection in the U.S. Bankruptcy Court for the District of New Jersey. This marks the drugstore chain’s second bankruptcy filing in recent years.
Initially, the company filed for bankruptcy in October 2023, intending to restructure its operations and sell parts of the business. After emerging from its first Chapter 11 protection, Rite Aid had reduced its store count from over 2,300 to around 1,200 locations.
Is Rite Aid closing all stores?
Rite Aid said it plans to keep stores open for the next few months as it tries to sell substantially all of its assets.
According to the Associated Press, all stores will eventually be closed or sold to new owners. The company is not purchasing new inventory, so empty shelves are expected to become increasingly common.
“I think what we’ll progressively see is the stores will become more and more spartan,” retail analyst Neil Saunders told the AP.
The pharmacy chain said that customers will still be able to “access pharmacy services and products in stores and online, including prescriptions and immunizations.”
“As we move forward, our key priorities are ensuring uninterrupted pharmacy services for our customers and preserving jobs for as many associates as possible,” Rite Aid CEO Matt Schroeder said in a statement on Monday.
The struggling drugstore said it acquired $1.94 billion in new financing to keep the stores operating during the proceedings. Rite Aid said employees will continue receiving pay and benefits as the company goes through the proceedings and potential sale.
The company runs 1,245 stores in 15 states, according to its website. It has a heavy presence in New York, Pennsylvania and California, which alone has 347 locations.
What will happen to Rite Aid Reward points and gift cards?
Following Monday’s announcement, Rite Aid Rewards points will no longer be issued for qualifying purchases starting on Tuesday, May 6. Existing points and BonusCash will also expire per the terms and conditions.
Additionally, Rite Aid said that it will no longer honor Rite Aid gift cards or accept any returns or exchanges starting on June 5, 2025.
The company plans to sell customer prescription files, inventory and other assets as it closes distribution centers and unloads store locations, according to the AP.
Rite Aid was attempting to turn around its business in a tough environment for drugstores, the Associated Press reported. Major chains and independent pharmacies have been closing stores and struggling with several challenges.
The bankruptcy filing comes as major chains and independent pharmacies have been closing stores and facing several challenges, such as theft, court settlements over opioid prescriptions and decreased consumer demand.
In March, Walgreens, which has a much wider range of stores than Rite Aid, agreed to be acquired by private equity firm Sycamore Partners.
