Drugstores like Walgreens and CVS are scaling back their retail footprints to counteract retail shrinkage and low profit margins. But for pharmacy giant Rite Aid, the future is more dire. There's been whispers that Rite Aid has been struggling to stay afloat amid crushing debt and decreased foot traffic, and could be headed towards its second bankruptcy in less than three years. Here's everything you need to know about Rite Aid's fate and whether or not your local store is closing.
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Rite Aid has filed for its second consecutive bankruptcy
Rite Aid is one of the founding fathers of the American drugstore industry. However, the chain has had a rough go of it in recent years. As Best Life previously reported in April, “In Oct. 2023, Rite Aid filed for Chapter 11 bankruptcy after falling into crippling debt and getting slammed with thousands of federal, state, and local lawsuits alleging that it had illegally fulfilled opioid prescriptions. On top of that, the chain was also struggling with declining sales on the heels of the COVID-19 pandemic.”
After weeks of uncertainty, the retailer’s senior bondholders have reached a verdict: Rite Aid is filing for bankruptcy again.
The company confirmed in a May 5 press release that it had entered voluntary Chapter 11 bankruptcy proceeds in the U.S. Bankruptcy Court for the District of New Jersey. According to the report, Rite Aid is having “active discussions with multiple interested potential acquirers,” and is looking to auction all or a majority of its locations.
“For more than 60 years, Rite Aid has been a proud provider of pharmacy services and products to our loyal customers. While we have continued to face financial challenges, intensified by the rapidly evolving retail and healthcare landscapes in which we operate, we are encouraged by meaningful interest from a number of potential national and regional strategic acquirers,” said Rite Aid CEO Matt Schroeder.
Does this mean Rite Aid stores are closing?
The short answer is yes. Rite Aid only has a few months left in the tank, as it continues its streak of store/distribution center closures, per ABC News. As Rite Aid navigates its second insolvency, Schroeder said that “ensuring uninterrupted pharmacy services” is one of “our key priorities.”
In pursuit of this, the retailer has received $1.94 billion in new financing, which will help with sustaining in-store operations. “During this process, Rite Aid customers can continue to access pharmacy services and products in stores and online, including prescriptions and immunizations,” the company confirmed.
Currently, Rite Aid operates 1,245 locations across the country, with a majority belonging to New York, Pennsylvania, and California. Additionally, Rite Aid serves customers in Connecticut, Delaware, Idaho, Maryland, Massachusetts, New Hampshire, New Jersey, Ohio, Oregon, Vermont, Virginia, and Washington.
Prior to its 2023 bankruptcy filing, Rite Aid managed about 2,200 full-service pharmacies and retail centers.
As of this reporting, Rite Aid hasn’t publicly announced when all locations will shutter indefinitely, but reports suggest that most will cease operations by the end of summer. Contact your local Rite Aid for updates and more information.
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What will Rite Aid do with customer prescriptions?
If you get prescriptions filled at Rite Aid, you should start looking for a new pharmacy. The chain said it’s “working to facilitate a smooth transfer of customer prescriptions to other pharmacies,” albeit there’s no telling where those might be located. In other words, your medications could be transferred to a pharmacy in the next town over.
Before the power is out of your hands, call your local Rite Aid today and request to transfer your prescriptions to another pharmacy of your choosing.
