CHILLICOTHE, Ohio — Pharmacy chain Rite Aid filed for Chapter 11 bankruptcy protection this week in the U.S. Bankruptcy Court for the District of New Jersey, the company announced. CEO Matt Schroeder attributed the filing to intensified financial challenges driven by the evolving retail and healthcare sectors.
Operating 1,240 stores across 15 states, Rite Aid assured customers that pharmacy services will continue uninterrupted and is facilitating prescription transfers to other pharmacies. “Our priorities are ensuring uninterrupted pharmacy services and preserving jobs for as many associates as possible,” Schroeder said.
Financing and Job Cuts
Rite Aid secured $1.94 billion in new financing to maintain operations during bankruptcy and a potential sale, with Schroeder noting “meaningful interest” from national and regional strategic buyers. However, Bloomberg News reported the company plans job cuts after failing to secure additional lender financing, citing an internal letter from Schroeder. Employees will continue receiving pay during the process.
Second Bankruptcy Filing
This marks Rite Aid’s second Chapter 11 filing, following a 2023 bankruptcy triggered by $750 million in losses. The prior filing reduced $2 billion in debt, closed hundreds of stores, sold its pharmacy benefit company Elixir, and settled lawsuits alleging the company ignored red flags in filling opioid prescriptions. Despite these efforts, Rite Aid emerged in 2024 as a private company with $2.5 billion in debt.
Industry Pressures and Pharmacy Deserts
Rite Aid, alongside competitors Walgreens and CVS, faces declining drug margins and competition from Walmart and Amazon, contributing to widespread store closures. These closures have raised concerns about “pharmacy deserts,” areas lacking local pharmacies, limiting access to essential medications, according to U.S. lawmakers and the National Community Pharmacists Association.