Rite Aid to Shutter Additional 53 Stores as Bankruptcy Proceedings Continue

Rite Aid has announced plans to shutter 53 additional stores across 9 states as the retail pharmacy chain works to restructure under Chapter 11 bankruptcy protection. The store closures impact locations in California, Maryland, Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania and Virginia. This is the latest round of closures for Rite Aid, which filed for bankruptcy in October 2022 citing the need to address high debt levels and underperforming locations.

According to court documents, Rite Aid is seeking approval from the bankruptcy court to proceed with closing the 53 stores. The pharmacy intends to use the closures and anticipated savings on rent and operating costs to strengthen its financial position during the bankruptcy process. Rite Aid had previously announced plans to close 154 stores but has steadily increased the number of closures as it aims to optimize its retail footprint.

How Will Additional Closures Impact Rite Aid Bankruptcy?

With the 53 new closures, Rite Aid will have shuttered over 200 locations as it navigates Chapter 11. The company believes downsizing will allow it to generate savings and emerge from bankruptcy as a leaner operation focused on its highest performing stores. Rite Aid must also finalize key legal settlements, including an agreement with the Department of Justice over past opioid sales practices, to achieve a restructuring approval from bankruptcy court.

Bondholders are currently voting on Rite Aid’s restructuring plan, which would give them majority ownership of the newly restructured company in exchange for debt forgiveness. If approved, the plan could help Rite Aid exit bankruptcy later this month, though a potential sale remains an alternative option. The additional 53 store closures are aimed at strengthening the pharmacy’s financials ahead of securing approval for its bankruptcy exit.