Rite Aid Goes Bankrupt Again Amid Ongoing Battle to Sustain Retail Presence

Rite Aid has filed for bankruptcy protection once more, announcing plans to sell off a significant portion of its business or close underperforming stores. The Philadelphia-based drugstore chain, which operates around 1,200 locations, has entered Chapter 11 proceedings in the U.S. Bankruptcy Court in New Jersey.

The company stated it is actively seeking buyers for most of its assets, supported by $1.94 billion in new financing. Discussions are reportedly ongoing with several interested parties.

While Rite Aid assured customers that its stores will remain open during this process, a letter from the company clarified that this applies to “the majority” of its locations for the next few months. It has not disclosed exactly how many stores might close, but court documents indicate that any unsold operations or assets will no longer be operated by the company.

This move marks another chapter in a broader trend among major pharmacy chains, which have been downsizing and grappling with declining foot traffic, tighter profit margins, and increasing competition from online and big-box retailers like Amazon and Walmart.

Rite Aid previously went through bankruptcy in late 2023, emerging with fewer stores and reduced debt by September 2024. However, CEO Matt Schroeder acknowledged ongoing difficulties, noting the rapidly changing retail and healthcare environments as contributing factors.

“We’re proud of our long history of serving communities,” Schroeder said, “and we’re committed to ensuring that customers continue to receive pharmacy services without interruption while we explore strategic options.”

The company has indicated that it will begin store liquidation sales at locations not included in asset sales. Meanwhile, employees involved in this transition will continue to receive their pay and benefits, and the company is coordinating the transfer of customer prescriptions where necessary.

Retail analyst Neil Saunders commented that this latest filing isn’t unexpected, given that the prior bankruptcy failed to fully address the company’s challenges. He noted inventory shortages, declining customer interest, and reduced cash flow as signs of a deteriorating business model.

Looking ahead, analysts predict limited interest in acquiring the entire company, though some competitors might selectively purchase stores in regions where Rite Aid has a strong foothold. Saunders noted that larger chains like Walgreens and CVS are unlikely buyers due to their own restructuring efforts. While some speculate that companies like Amazon might explore acquisitions of specific subsidiaries, full acquisition appears unlikely.

Despite the uncertainty, Rite Aid says it has adequate resources to manage the sale process and continue operating during the court proceedings.