News Summary
Rite Aid has filed for Chapter 11 bankruptcy for the second time in two years, announcing plans to close stores and auction off nearly all of its 1,240 locations across 15 states. Initial closures include 47 locations in nine states, with all New York stores set to shut down. Employees will receive layoff notices starting June 4, 2025. The company attributes the bankruptcy to unsuccessful efforts for additional capital amid financial struggles linked to the opioid crisis and declining sales. Liquidation sales are already underway.
California – Rite Aid has filed for Chapter 11 bankruptcy for the second time in two years, with plans to close stores and auction off leases and buildings. The company will begin the sale process with nearly all of its 1,240 stores across 15 states expected to be listed for sale pending court approval.
As part of the bankruptcy process, Rite Aid has identified 47 locations across nine states set to close initially. The announced closures will affect stores in California, Connecticut, Massachusetts, New Hampshire, New Jersey, New York, Oregon, Pennsylvania, and Washington. In New York alone, Rite Aid plans to close all 178 of its stores, including 11 stores located in the Capital Region. Closure notices indicate that stores will cease honoring gift cards, returns, and exchanges starting June 5, 2025.
Beginning on June 4, 2025, employees will start receiving layoff notifications, with the initial round of layoffs commencing shortly thereafter. Rite Aid’s CEO stated that unsuccessful efforts to secure additional capital to sustain operations led to this decision. Employees have been informed that their respective store locations are likely to close as part of the bankruptcy process.
In an additional adjustment to their operations, Rite Aid will no longer issue points for rewards members, and any accumulated points will expire in accordance with the terms of the loyalty program. The company also plans to sell its prescription files to competitors; however, there is no assurance that the transferred files will go to nearby pharmacies.
The store closures are seen as part of Rite Aid’s strategy to maximize value for creditors amidst challenges rooted in the opioid crisis. Financial difficulties have beset the pharmacy chain, with substantial sales declines driving negotiations with lenders, which ultimately proved unsuccessful. This follows a previous bankruptcy protection filing in 2023 that prompted the closure of numerous locations across the country.
Liquidation sales are already in effect at various Rite Aid stores, and more locations are anticipated to shut down in the upcoming months. As the retail landscape grows increasingly competitive with rivals like Walmart, CVS, and Walgreens, Rite Aid’s viability as a pharmacy chain continues to dwindle.
Background Information
Founded in 1962 in Scranton, Pennsylvania, Rite Aid expanded rapidly, reaching a peak of over 5,000 locations nationwide. However, the ongoing financial struggle and changing market dynamics have created significant challenges for the company, leading to its current financial predicament. Customers are now encouraged to transfer their prescriptions to alternative pharmacies as Rite Aid moves forward with its bankruptcy proceedings.
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