Rite Aid has announced that it is filing for bankruptcy again, just seven months after it emerged from Chapter 11 bankruptcy as a private company. The pharmacy chain is looking for a buyer, and its re-filing for bankruptcy protection is meant to help facilitate that process. Despite the bankruptcy, Rite Aid will continue to keep its stores open.
CEO Matt Schroeder stated that while the company has faced significant financial challenges, especially due to changes in the retail and healthcare sectors, there has been considerable interest from potential buyers. The company’s priorities during this process include maintaining pharmacy services for customers and protecting as many jobs as possible.
Rite Aid first filed for bankruptcy in October 2023, partly due to its position as the second-largest drugstore chain, a legacy of expensive legal battles, and nearly $4 billion in debt, much of which stemmed from accusations related to filling unlawful opioid prescriptions. The chain underwent a year-long Chapter 11 process, emerging in September 2024 with $2 billion in debt reductions, $2.5 billion in funding, and the closure of around 500 locations.
Despite the new financing and its ongoing bankruptcy filing, Rite Aid continues to struggle. It is the third-largest standalone pharmacy chain in the U.S., with around 1,250 stores remaining — half of the number it had just two years ago. The company had previously rejected a $17 billion buyout offer from Walgreens in 2015 due to antitrust concerns. A smaller deal in 2017 resulted in Walgreens purchasing nearly 2,000 Rite Aid locations, leaving the company significantly diminished and unable to compete with larger rivals.
Neil Saunders, the managing director of GlobalData, remarked that Rite Aid’s second bankruptcy wasn’t surprising, as the company has struggled to maintain inventory levels and resolve its ongoing issues. He suggested that other drugstore and retail chains may purchase individual Rite Aid stores, rather than acquiring the company in full.
Rite Aid’s bankruptcy comes as other major pharmacy chains face their own difficulties. Walgreens Boots Alliance announced plans to go private in a deal valued at $24 billion, following a decline in its market cap and the closure of over 1,200 locations. CVS has also closed more than 1,000 stores and laid off thousands of employees, experimenting with smaller-format stores that focus exclusively on pharmacy services. These pharmacy giants have all faced challenges, including declining prescription reimbursements, over-expansion, and competition from retailers like Amazon and Target, as well as issues related to theft, which have affected their profitability.
