Rite Aid, one of the largest US pharmacy retailers, has filed for Chapter 11 bankruptcy. Stores will remain open through restructuring, but Rite Aid will look to close underperforming locations, sell its pharmacy benefit company Elixir, and resolve opioid lawsuits.
WHO: Founded in 1962, Rite Aid is the third-largest drug chain, employing 45,000 people at more than 2,000 retail stores in 17 states. The company had $24 billion in revenue in the fiscal year 2023 and losses of $750 million. Rite Aid has been a proponent of integrating emerging beauty brands into their merchandise assortment.
WHY: One of the largest pharmacy retailers in the US, the business had succumbed to the pressure of high debt, revenue declines, increased competition, and opioid litigation. Rite Aid had $750 million in losses for fiscal year 2023 and faces 1,600 opioid lawsuits from state and local governments, hospitals, and individuals.
IN THEIR OWN WORDS: Jeffrey S. Stein, Chief Executive Officer and Chief Restructuring Officer, said, "Rite Aid has served customers and communities across our country for more than 60 years, and the important actions we are taking today will enable us to move ahead as a stronger company. With the support of our lenders, we look forward to strengthening our financial foundation, advancing our transformation initiatives and accelerating the execution of our turnaround strategy. In doing so, we will be even better able to deliver the healthcare products and services our customers and their families rely on—now and into the future."
Mr. Stein continued, "We remain focused on serving our customers and communities, and we are grateful that they continue to choose our stores and pharmacies for their healthcare needs. We thank our associates for their ongoing hard work and dedication, and we extend our gratitude to our partners, suppliers and vendors for their continued support."
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