For the second time in a year and a half, pharmacy chain Rite Aid has filed for bankruptcy – and this time, it could be the end for the 63-year-old retailer.
Rite Aid announced this afternoon that it had begun Chapter 11 proceedings and is “pursuing a strategic and value-maximizing sale process for substantially all of its assets.” It says it is in “active discussions with multiple interested potential acquirors,” but did not say whether any potential buyers would buy stores piecemeal, buy the entire chain, convert them to other banners or, less likely, continue operating them under the Rite Aid name. “Any operations or assets the Company does not sell through this process will no longer be owned or operated by Rite Aid,” the company’s bankruptcy filing reads.
“We have continued to face financial challenges, intensified by the rapidly evolving retail and healthcare landscapes in which we operate,” Rite Aid CEO Matt Schroeder said in a statement. As the company weighs interest from “a number of potential national and regional strategic acquirors,” he said the retailer’s “key priorities are ensuring uninterrupted pharmacy services for our customers and preserving jobs for as many associates as possible.”
For many customers and employees, it’s already too late. Rite Aid has closed a number of stores and issued layoff notices in recent days, some as recently as today. In a letter to associates that one employee posted online earlier today, Schroeder wrote that the company would “conduct employee separations in connection with the closing of certain facilities” and that affected employees would be laid off, effective immediately.
“We apologize that we were unable to provide more advance notice of this action,” the letter goes on. But “we have no choice but to conduct employee separations at this time to enable us to continue to meet anticipated future payroll and employment related expenses.” Citing “the dramatic downturn in the economy, potential litigation, and increased costs (including tariffs) from our suppliers and landlords,” the letter said closing stores and laying off employees was its only choice.
Rite Aid has had a rocky history in recent years. A decade ago, Walgreens announced a planned buyout of the chain. But that deal fell through and Rite Aid sold nearly 2,000 of its stores to Walgreens instead. A few years later, the Albertsons grocery chain offered to buy the rest of Rite Aid, but that deal also went bust a short time later.
And in late 2023, Rite Aid filed for bankruptcy. It emerged from that process, but could not emerge from under its many challenges. The latest store listings on Rite Aid’s website show 1,240 locations, down by almost half since its last bankruptcy, and way down from the company’s peak of more than 5,000 stores back in 2008.
Rite Aid says the stores that are currently open, will remain open for “the next few months.” For now, “Rite Aid customers can continue to access pharmacy services and products in stores and online,” the company pledged, as it works “to facilitate a smooth transfer of customer prescriptions to other pharmacies.”
“I will be forever grateful to our thousands of associates for their commitment to Rite Aid and its mission, and I thank our entire team – from store associates to corporate employees – for their dedication to our customers and our company,” Schroeder said. “With their support, we have played a critical role in supporting the healthcare needs of countless Americans across the communities that we are honored to serve.”
The only question that remains, is just how much longer Rite Aid will be able to continue to serve customers and communities – and who, if anyone, will take over its stores to do so going forward.
Image source: Rite Aid
