The final curtain for decades-long beleaguered drug chain Rite Aid appears close at hand. Earlier this month, the Pennsylvania-based retailer, which has headquarters in Philadelphia and Camp Hill, filed for bankruptcy, the second time in 19 months.
This time it appears there’ll be no restructuring or an attempt to survive another round of deep cuts. The second filing almost certainly means that Rite Aid will ultimately liquidate after it finds buyers for most or all of its remaining 1,240 stores in the U.S.
There had been much speculation over the past six weeks that the drug chain, founded by the late Alex Grass in Scranton, PA in 1962, was quickly running out of money. On May 5, the company made it official by filing again in Trenton, NJ and listing its liabilities as between $1 billion and $10 billion.
“While we have continued to face financial challenges, intensified by the rapidly evolving retail and healthcare landscapes in which we operate, we are encouraged by meaningful interest from a number of potential national and regional strategic acquirers,” Rite Aid CEO Matt Schroeder said shortly after the filing.
Schroeder added that Rite Aid’s main priorities ahead are maintaining uninterrupted pharmacy services for customers and preserving as many jobs as possible.
The filing stated that the drug chain has secured almost $2 billion in financing to fund this bankruptcy to ensure a smooth transfer of prescriptions to other pharmacies.
Analysts thought the survival of Rite Aid was questionable when the company entered bankruptcy for the first time in October 2023, after it had lost approximately $750 million in the previous fiscal year. Before it emerged from that Chapter 11 filing in August 2024, Rite Aid closed hundreds of stores nationally, reduced its debt by about $2 billion, sold its pharmacy benefit firm Elixir to MedImpact Healthcare Systems, and settled hundreds of opioid-related lawsuits.
However, the drug chain still held a $2.5 billion debt and was now owned by its bondholders. Even after that restart, the momentum never came back. Today, the company is a shadow of its former self, having closed about 800 of its approximately 2,000 stores in the past two years alone.
