Report: Rite Aid to Close Hundreds of Stores in Bankruptcy Filing
Rite Aid is negotiating terms of a bankruptcy plan that could see a significant number of its more than 2,100 drugstores permanently close, according to a report. People familiar with the company's talks with creditors told The Wall Street Journal that Rite Aid has proposed to close as many as 500 stores in bankruptcy, and either sell or let creditors take over its remaining operations. The Philadelphia-based company operates more than 2,330 stores in 17 U.S. states, although it is much smaller than rivals such as Walgreens Boots Alliance and CVS Health.
Total Retail's Take: Challenged by more than $3.3 billion in debt and more than a thousand federal lawsuits over its alleged role in the opioid epidemic, Rite Aid is seeking the protection of a Chapter 11 bankruptcy filing to reorganize and cut costs. One such action often taken by retailers in similar situations is to downsize its physical store footprint. Rite Aid plans to follow suit, closing an undetermined-as-of-yet number of stores. The retail pharmacy chain will be tasked with finding a profitable path forward in a competitive industry that's led by two primary players, CVS and Walgreens. But first comes freeing itself from the burdensome debt load it is carrying, clearing itself of outstanding legal entanglements, and rightsizing its store count.
