The U.S. Bankruptcy Court of New Jersey has approved a plan for Rite Aid to sell 64 of its stores to CVS Health and the prescription files of 625 Rite Aid pharmacies across 15 states, with more details about the deal to be revealed in the coming weeks, according to an announcement from CVS.
The transaction is still subject to the necessary regulatory approvals and customary closing conditions.
Rite Aid said in an announcement that it would be embarking on a "rolling transition," selling off more than 1,000 of its stores across the U.S. to operators including CVS Pharmacy, Walgreens, Albertsons, Kroger and Giant Eagle, as well as the sale and operation by CVS Pharmacy of many Rite Aid and Bartell Drugs stores located in Washington, Oregon and Idaho.
Bankruptcy courts are still evaluating those other deals.
Rite Aid said its stores will remain open during the transition and that customers can continue to access pharmacy services during that time.
"These agreements ensure our pharmacy customers will experience a smooth transition while preserving jobs for some of our valued team members," said Rite Aid CEO Matt Schroeder.
Rite Aid filed for bankruptcy a second time this month. The drug store chain has been unable to secure additional funding to continue operating, Schroeder told employees in a letter obtained by Bloomberg.
Job cuts are also reportedly slated at its corporate headquarters in Pennsylvania. The reduction is due to the downturn in the economy, tariffs and increased costs from suppliers, Schroeder said.
Rite Aid is working with its current lenders to access $1.94 billion in new financing to support the company during the sale process, it said at the time.
THE LARGER TREND
Rite Aid filed for bankruptcy in October 2023 and received a commitment for $3.45 billion in new financing to implement a financial restructuring plan.
The plan would significantly reduce the company's debt, Rite Aid said, including that from the more than 1,600 opioid lawsuits that have been a drain on its resources.
At the time, Rite Aid said it was in the process of closing 164 of its 2,100 stores and would seek permission to shutter additional underperforming stores.
In September 2024, Rite Aid Corp. said it had successfully completed its financial restructuring and emerged from Chapter 11 bankruptcy, cutting about $2 billion worth of total debt and adding $2.5 billion in exit financing.
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.