Rite Aid has filed for Chapter 11 bankruptcy again, just seven months after emerging from its previous filing in late 2023. The troubled drugstore chain is now actively searching for a buyer as it continues to face mounting financial and operational challenges.
Despite the bankruptcy filing, the company stated it will keep its stores open during the restructuring process. Rite Aid CEO Matt Schroeder said the move is part of an effort to stabilize operations while maintaining pharmacy services and protecting as many jobs as possible.
“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 acquirors,” said Schroeder.
A History of Struggle
Rite Aid first filed for bankruptcy in October 2023, primarily due to massive debt and costly legal battles related to its alleged role in the opioid crisis. At its peak, the company faced nearly $4 billion in debt. After a year in bankruptcy, it emerged in September 2024, having reduced debt by $2 billion, secured $2.5 billion in funding, and closed around 500 underperforming locations.
However, this second filing comes as the company continues to struggle with low inventory levels, poor market competitiveness, and a shrinking store count — now down to about 1,250 locations, half of what it had two years ago.
Missed Opportunities and Industry Shifts
Back in 2015, Walgreens attempted to acquire Rite Aid for $17 billion. However, due to antitrust concerns, the deal was scaled back. In 2017, Walgreens ended up buying fewer than 2,000 Rite Aid stores for $4.4 billion, leaving the company weakened and unable to compete with industry giants like CVS and Walgreens.
Neil Saunders, Managing Director at GlobalData, noted that the company’s previous bankruptcy “did little to resolve” its core issues and that the latest move isn’t surprising. With Walgreens no longer in a position to rescue Rite Aid, he predicts that other retail and pharmacy chains may opt to cherry-pick locations instead of a full acquisition.
Industry-Wide Turmoil
Rite Aid’s challenges are not unique. Major competitors like Walgreens and CVS are also downsizing. Walgreens announced in March it’s being taken private in a $24 billion deal, while CVS has closed over 1,000 stores and initiated mass layoffs.
All three pharmacy giants are grappling with declining prescription reimbursements, increased competition from retailers like Amazon and Target, and rising incidents of retail theft — all of which have significantly eroded profitability.
Once worth nearly $100 billion, the U.S. pharmacy retail industry has seen its combined value shrink to just $9.5 billion.
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