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 locations across 15 states. Nearly all of its 1,240 locations will be listed for sale pending court approval. The company faces financial challenges, with significant store closures, including all 178 stores in New York. Employees have started receiving layoff notifications, and liquidation sales have begun at various locations. Rite Aid aims to restructure to maximize value for creditors amid an intensely competitive retail environment.
California – Rite Aid has filed for Chapter 11 bankruptcy for the second time in two years, announcing plans to close stores and auction off leases and buildings across 15 states. Nearly all of Rite Aid’s 1,240 locations are slated to be listed for sale pending court approval, marking a significant restructuring effort by the company amidst ongoing financial challenges.
A&G Real Estate Partners has been appointed to manage the sale process, which will include rolling bid deadlines and auctions set to commence in May 2025. Initially, Rite Aid has identified 47 locations across nine states that will close as part of the bankruptcy process. This list of closures includes 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, which includes 11 locations in the Capital Region. Closure notices indicate that starting June 5, 2025, these stores will no longer honor gift cards, returns, or exchanges. Employees have already begun receiving layoff notifications, with the initial layoffs scheduled to start on June 4, 2025.
Rite Aid’s Chief Executive Officer has stated that the company made extensive efforts to secure additional capital to sustain operations, which were unsuccessful and ultimately led to the decision to lay off employees. The pharmacy chain has been grappling with financial difficulties, facing significant competition from major retailers like Walmart, CVS, and Walgreens, which have adversely impacted its sales and overall viability.
The company previously filed for bankruptcy protection in 2023, resulting in the closure of several stores and a drastic reduction in its operational footprint. As part of the current bankruptcy process, employees have been informed that their respective locations will likely shut down. Customers have also been alerted that Rite Aid will stop issuing points for rewards members, and any accumulated points will expire as per the existing terms of the loyalty program.
In addition to store closures, Rite Aid is expected to sell prescription files to competing pharmacies, although there is no assurance that the transferred files will go to nearby locations. The store closures are viewed as a strategy to maximize value for creditors in a marketplace heavily affected by the opioid crisis and changing consumer behaviors.
Liquidation sales have already begun at several Rite Aid locations, and observers anticipate that multiple stores will close in the coming months as the company implements its bankruptcy plan. Rite Aid, which was founded in 1962 in Scranton, Pennsylvania, has seen its number of locations dwindle from a peak of over 5,000 as it struggles to adapt to an intensely competitive retail environment.
With increasing pressure from competitors and declining sales leading to unsuccessful negotiations with lenders, Rite Aid’s future as a pharmacy chain becomes increasingly uncertain. Customers are encouraged to promptly transfer their prescriptions to other pharmacies to avoid disruption in their access to medications as the situation evolves.
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