Rite Aid has filed for bankruptcy for a second time as it seeks a buyer.
Rite Aid filed for Chapter 11 in U.S. Bankruptcy Court for the District of New Jersey to pursue a sale of its prescriptions, pharmacy and front-end inventory, and other assets, the company said.
The drug store chain has been unable to secure additional funding to continue operating, CEO Matthew 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.
WHY THIS MATTERS
Rite Aid is working with its current lenders to access $1.94 billion in new financing to support the company during the sale process. Rite Aid said it has been in "active discussions with multiple interested potential acquirers."
Stores remain open and the pharmacies are filling prescriptions and conducting immunizations, the company said. However, Rite Aid said it is working to facilitate a smooth transfer of customer prescriptions to other pharmacies. Rite Aid employees assisting with this process will continue to receive pay and benefits.
Schroeder said: "For more than 60 years, Rite Aid has been a proud provider of pharmacy services and products to our loyal customers. 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. As we move forward, our key priorities are ensuring uninterrupted pharmacy services for our customers and preserving jobs for as many associates as possible."
The company intends to divest or monetize any assets that are not sold through the court-supervised process. Rite Aid has filed a number of customary motions with the court seeking authorization to support operations, including continued payment of employee wages and benefits.
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 close additional underperforming stores.
In September 2024, Rite Aid Corporation 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.
Email the writer: SMorse@himss.org