ONE OF YOUR DRUG STORES IS IN TROUBLE

RITE AID IS SCREWED.

Rite Aid, the Philadelphia-based drugstore chain, has filed for Chapter 11 bankruptcy for the second time in two years, just seven months after emerging from its previous restructuring in September 2024. The company, which operated over 2,000 stores and employed 47,000 people when it filed for bankruptcy in October 2023, now faces severe financial strain, with only 1,245 stores remaining across 15 states. The latest filing, announced on Monday, aims to negotiate with lenders to reduce debt and facilitate a potential sale, as Rite Aid is actively seeking a new owner. During this process, the chain will keep stores open and ensure customer prescriptions are transferred to other pharmacies.

The second bankruptcy was deemed inevitable by retail expert Neil Saunders of GlobalData, who noted that the first restructuring failed to resolve Rite Aid’s core issues. The company struggles with insufficient funds to stock shelves, leading to a poor shopping experience that drives customers away. Rite Aid, once the third-largest U.S. drugstore chain with 5,059 locations in 2008, has closed over 700 stores since its 2023 bankruptcy, including nearly all in Ohio and Michigan, raising concerns about "pharmacy deserts" in affected areas.

Rite Aid faces intense competition from CVS, Walgreens, and Amazon’s online pharmacy, launched in 2020. Additionally, hundreds of lawsuits accusing the company of overprescribing opioids have compounded its financial woes, with settlements reached during the prior bankruptcy. The chain’s 2023 restructuring cut $2 billion in debt and sold its pharmacy benefit company, Elixir, but these measures proved insufficient. If no buyer emerges, further store closures are likely, aligning with a broader retail "apocalypse" that saw 7,300 U.S. store closures in 2024, with experts predicting up to 15,000 in 2025.