Drugstore retailer Rite Aid, struggling to find its footing in the competitive drugstore retail space, filed for Chapter 11 bankruptcy protection Monday, the second time in under two years that the Camp Hill, Pa.-based retailer has sought the bankruptcy shield.
Pharmacy chains such as Rite Aid, as well as rivals Walgreens and CVS, have seen profit margins decline in the face of deep-pocketed competitors such as Walmart and Amazon. They are also seeing operating costs rise because of increasing theft, forcing them to spend on extra security.
Reduced numbers of pharmacies have raised concerns among politicians and trade groups like the National Community Pharmacists Association about so-called “pharmacy deserts,” where residents lack access to local drugstores for medications.
Customers will be able to access pharmacy services and that it is “working to facilitate a smooth transfer of customer prescriptions to other pharmacies,” the company said in a news release. Customers can use the Rite Aid store locator tool to find contact information for their local store.
Employees will continue to be paid though Bloomberg News reported Monday that the company will cut jobs after failing to secure additional financing from its lenders, citing an internal letter from CEO Matt Schroeder.
Rite Aid operates 1,240 stores across 15 states and will begin a process of selling and closing its locations. Rite Aid has 60 stores in New Jersey. The company announced that it has acquired $1.94 billion in new financing to keep stores operating during the bankruptcy process and potential sale. The company’s liabilities are between $1 billion and $10 billion, according to a Chapter 11 filing in New Jersey. Rite Aid first filed for Chapter 11 in October 2023.
