Rite Aid filing second bankruptcy as it seeks job cuts

Rite Aid has filed for bankruptcy, the company announced on Monday, the second time the nationwide pharmacy chain has taken the step since October 2023.

“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 acquirors,” CEO Matt Schroeder said in a statement.

“As we move forward, our key priorities are ensuring uninterrupted pharmacy services for our customers, and preserving jobs for as many associates as possible,” he added.

The firm has liabilities between $1 billion and $10 billion, according to a petition filed in New Jersey bankruptcy court that was obtained by Reuters.

The company has secured nearly $2 billion in new financing from existing partners as it continues its transition process, it announced.

The pharmacy retailer, one of the largest in the U.S., plans to begin cutting jobs, Bloomberg reports.

Reports that Rite Aid was low on cash and preparing a sale emerged in April, a month after the chain reportedly entered into talks with creditors over concerns it was running out of liquidity.

The company previously filed for bankruptcy in October 2023, after it suffered $750 million in losses the previous financial year.

Rite Aid used the bankruptcy to cut $2 billion in debt, close hundreds of stores, and sell its pharma benefit company, as well as negotiate settlements in a series of opioid lawsuits.

By 2024, the company still had some $2.5 billion in debt and was owned by its lenders.

The chain has faced challenges that have hit the entire industry, including declining drug margins and competition from superstores and online marketplaces.

Rite Aid locations have reportedly been closing across the country over the last two years in states including California, New York, New Jersey, Pennsylvania, New Hampshire, Oregon, and Washington, among others.

Its competitors are also facing challenges.

Walgreens reportedly plans to close some 1,200 stores in the next three years, and in March was acquired by private equity firm Sycamore Partners in a deal worth $23.7 billion.

CVS has said it plans to close 270 more stores in 2025.