This week, Rite Aid, which was once the largest pharmacy chain in the United States, filed for bankruptcy protection from its creditors and promised to transform the company into a “modern neighborhood pharmacy.”
In one of its first steps in this new phase, the company announced it would close 154 stores in more than 10 states.
The store closures aim to help Rite Aid save money on rent and improve its financial situation.
The bankruptcy of Rite Aid comes after years of steady sales declines. The company also faces over a thousand lawsuits accusing it of generating illegal revenue from painkillers. The chain has more than 2,000 stores in 17 states, far fewer than its competitors CVS Pharmacy, which has nearly 10,000 stores nationwide, and Walgreens, which has almost 9,000. Rite Aid significantly reduced its footprint after a failed merger with Walgreens in 2017.
In June, according to company records, Rite Aid had debts of at least $3.3 billion. Its stock has fallen nearly 80% since the beginning of the year.
The company secured $3.45 billion in financing from its creditors to operate during the bankruptcy restructuring, according to a company statement. Rite Aid will also sell its pharmacy benefits management company Elixir to MedImpact Healthcare Systems.
Jeffrey Stein, appointed as the new CEO of Rite Aid, stated that the chain would use the bankruptcy process to emerge as “a stronger company.”
With about 45,000 employees, Rite Aid will also offer workers at closing stores the option to transfer to other locations “when possible.”
The store closures include: 38 in Pennsylvania, 31 in California, 20 in New York, and 19 in Michigan, among other locations.
Source: The New York Times