Rite Aid, the third-largest U.S. drugstore chain, filed for Chapter 11 bankruptcy protection Sunday, and it's likely the company will close a big chunk of its 2,000 stores.
One result is that people will have fewer options for where they fill their prescriptions. That has been the trend in drugstores lately, and it looks like they'll dwindle further.
The Wall Street Journal reported in September that Rite Aid might close 400 to 500 stores as part of bankruptcy proceedings. (The company hasn't confirmed the report.) CVS is closing 300 stores per year, a process that began last year and is expected to continue into next year, and Walgreens announced in June that it would close about 150 U.S. stores by next summer.
At the same time, big box chains and grocery stores like Walmart and Target are opening pharmacies in their stores, and more people are getting their medications delivered through apps.
Rite Aid was undone by competition from larger rivals, its $3.3 billion debt load, and expensive legal battles for its alleged role in fueling the opioid crisis.
It comes amid walkouts by Walgreens pharmacists and technicians around the country and at CVS stores in Kansas City over low pay and understaffed stores.
Rite Aid Corporation (NYSE: RAD) (“Rite Aid” or the “Company”) today announced it has reached an agreement in principle with certain of its senior secured noteholders on the terms of a financial restructuring plan that will allow the Company to accelerate its ongoing business transformation. Implementing the contemplated restructuring plan will significantly reduce the Company’s debt, increase its financial flexibility and enable it to execute on key initiatives. In connection with this, Rite Aid has initiated a voluntary court-supervised process under Chapter 11 of the U.S. Bankruptcy Code.
Rite Aid is continuing to deliver leading healthcare products and services across its retail and online platforms for the nearly one million customers it serves daily. The Company remains committed to improving health outcomes and delivering on its purpose to help people achieve whole health for life.
Earlier this month, Rite Aid notified the New York Stock Exchange that it was not in compliance with listing standards. During a grace period, the company’s stock continues to be listed and traded.
Walgreens attempted to buy Rite Aid for about $9.4 billion in a deal announced in 2015. But the larger drugstore chain scaled back its ambition a couple years later and bought only a chunk of Rite Aid, around 1,900 stores, to get the deal past antitrust regulators.
In 2018, Rite Aid shares plunged after the company called off a separate merger with the grocer Albertsons, which is currently trying to merge with another grocer, Kroger.
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