By Daily Mail (U.S.) | Created at 2025-04-05 01:54:59 | Updated at 2025-04-05 09:05:21
7 hours ago
Rite Aid is considering filing for bankruptcy — again.
Less than a year after emerging from Chapter 11, the drugstore chain is weighing another restructuring after its recent turnaround efforts failed to steady the business, the Wall Street Journal reported on Friday.
At the time it filed for last bankruptcy in October 2023, the company operated more than 2,000 stores and employed about 47,000 people.
After shuttering hundreds of locations — including almost all in Ohio and Michigan — Rite Aid emerged from bankruptcy with around 1,300 stores. It is a far cry from 2008 when it operated 5,059 locations.
The Philadelphia-based company has also been exploring a potential sale of parts or all of its operations as an alternative to bankruptcy, sources told the Journal.
If a buyer doesn’t emerge — either in or out of court — the chain could be forced to shut down even more of its stores.
Rite Aid remains a distant third in the retail pharmacy race, trailing industry giants CVS and Walgreens.
The sector is in the midst of major upheaval, including Walgreens' recent deal to go private in a leveraged buyout led by Sycamore Partners
Rite Aid shut more than 700 stores after it filed for bankruptcy in October 2023
Three people browse the sparse shelves of a Brooklyn Rite Aid in August 2023, months before it would declare bankruptcy
Rite Aid has been facing a series of challenges. Drugstores, generally, are struggling to compete with big-box chains and with Amazon, which launched its own online-only pharmacy in 2020.
On top of that, Rite Aid faced a series of lawsuits accusing the company of overprescribing opioids.
Rite Aid's move to almost totally leave Ohio and Michigan sparked panic.
Experts think that Rite Aid is moving out of areas where it cannot compete with much bigger chains CVS and Walgreens, which also owns Duane Reade.
Instead it is focusing where it can aim to be number two behind one or the other, such as in Pennsylvania.
Walgreens, the second largest pharmacy in the US behind CVS, is grappling with its own financial troubles, announcing last month it would close a 'significant' number of its 8,700 US stores.
The widespread 'retail apocalypse' that has seen brick-and-mortar stores struggle to combat rampant theft and increasingly tight margins is certainly not contained to drugstores.
There were almost 2,600 store closures in the first four months of 2024. If that trend continues, almost 8,000 will have been lost by the end of the year.
Upon seeking bankruptcy protection last October, Rite Aid announced it would initially shutter 154 underperforming retail locations across over a dozen states. Over the past nine months, it shut an additional 618
A woman browses the shelves of a Rite Aid in Alhambra, California on October 18, 2023. This store was due to close in days following the bankruptcy announcement on October 15
Rite Aid was once the the third largest drugstore chain in the country, operating over 5,000 locations across the US. After the bankruptcy, that could dwindle to just 1,300
The closures come amid a broader retail shake-up, with experts warning that up to 15,000 physical storefronts could shut down nationwide by the end of the year —double the 7,000 that closed in 2024.
Dozens of giant chains — including Macy's, Party City, and Big Lots — launched a massive slate of store closures in the past 12 months amid changing customer trends.
Dollar stores have been hit hard too, with 99 Cents Only announcing in April it would shutter all 371 of its locations across California, Texas, Arizona and Nevada.
Express - a mall staple - filed for bankruptcy last April and said it would shut 95 Express outlets alongside all of its UpWest stores.
It has also been a tough 12 months for home improvement chains. LL Flooring entered bankruptcy in September, and was set to close all 442 stores across 47 states under a buyer came in later that month.
Meanwhile, The Container Store shut stores after bankruptcy in December.
