Troubled drugstore retailer Rite Aid, which emerged from Chapter 11 bankruptcy reorganization last year, is considering refiling bankruptcy and selling itself piecemeal, according to reports.
Rite Aid is now running out of cash and is preparing to try to sell individual stores and close the rest, according to reporting from Bloomberg. The company closed more than 800 stores after its 2023 bankruptcy filing and still operates more than 1,200 locations.
The Wall Street Journal previously reported that Rite Aid has engaged law firm Paul Weiss to help it consider its options, including another potential bankruptcy filing.
A Rite Aid spokesperson could not be reached for comment.
Rite Aid closures reported around the U.S.
Rite Aid has been closing underperforming stores around the country for the past two years, and local reports of ongoing store closures have continued to crop up in the past several weeks. In the past month Rite Aid closings have been reported in California, New York, New Jersey, Pennsylvania, New Hampshire, Oregon, Washingtonand elsewhere.
Reports on Reddit indicate that the company has also cut back on staffing and reduced operating hours at some locations.
Drugstore channel in turmoil
The reports of Rite Aid’s possible liquidation come as the other two major national drugstore chains have also been under pressure. All three have been weighed down by massive opioid lawsuit settlements, competition from other channels, and overbuilt footprints that resulted in a glut of store locations.
Walgreens plans to close some 1,200 stores in the next three years and recently agreed to be acquired by private equity firm Sycamore Partners, and CVS is eyeing more potential store closures as it rethinks its retail strategy.
Rite Aid emerged from bankruptcy as a private company owned by a group of its creditors last year after closing hundreds of stores, eliminating nearly $2 billion in debt, and selling its pharmacy benefit division, Elixir. It also named a new CEO, Matt Schroeder, and secured $2.5 billion in exit financing.
