Rite Aid Considers Closing Up To 500 Stores In Bankruptcy Proceedings
Rite Aid has proposed closing between 400 and 500 of its stores as part of its bankruptcy proceedings and either selling or turning over the remaining stores to its creditors, The Wall Street Journal reports, citing anonymous sources familiar with the negotiations.
Some of the company's bondholders want even more closures than that, the WSJ reports.
The pharmacy chain, which has about 2,300 stores in 17 states, is mired in roughly $3.3B in debt and is beset by more than 1,000 lawsuits.
The suits, filed both in federal and state courts, allege that Rite Aid filled unlawful prescriptions for controlled substances, contributing to the opioid crisis nationwide. The company has denied those allegations.
The Department of Justice filed a suit in March, alleging that the company “repeatedly filled prescriptions for controlled substances that had obvious, and often multiple, red flags indicating misuse.”
Even before its legal troubles related to opioids, Rite Aid had been struggling, squeezed by competition from larger rivals Walgreens and CVS. In 2022, the company closed about 145 unprofitable stores, and a year ago, a Deutsche Bank analyst warned that the company might go under.
Rite Aid stock dropped on word of the possible closures, trading on Monday for less than 50 cents per share. A year ago, its stock traded for just over $6.50 a share.