Sponsored By

Rite Aid files for Chapter 11 bankruptcy

Restructuring will give the company new hope, but hundreds of stores could close

Bill Wilson, Senior editor at Supermarket News

October 16, 2023

1 Min Read
Rite Aid storefront.jpeg
Getty Images

Rite Aid has filed for bankruptcy as it tries to dig out from under billions of dollars in debt mainly caused by opioid lawsuits, reports the Washington Post.

The Chapter 11 filing allows the Philadelphia-based retailer to restructure its debt, which sits at $3.3 billion. Lenders have agreed to provide $3.45 billion in debt relief. Rite Aid is expected to close stores, which could be in the hundreds, but the exact amount is not known at this time.

Jefferey Stein has been appointed CEO as part of the new structuring.

“The important actions we are taking today will enable us to move ahead as a stronger company,” said Stein.

Over the last year, Rite Aid has been engulfed in opioid lawsuits. Back in March, the Department of Justice sued the retailer, accusing it of filling hundreds of thousands of prescriptions for illegal drugs including opioid between May 2014 and June 2019. The DOJ said Rite Aid was filling prescriptions for “trinities,” which is a combination of opioids, benzodiazepine, and muscle relaxants. 

More recently, Rite Aid was in danger of being delisted from the New York Stock Exchange as its stock price and market capitalization has plunged. The company’s stock has lost about 80% of its value since July.

Retail shrink has not helped Rite Aid, either. During a second quarter earnings call Chief Financial Officer Matthew Schroeder losses were around $9 million higher last year.

Related:5 things top news: Rite Aid faces NY stock exchange delisting

Stein said the bankruptcy filing will allow the company to accelerate the process of closing stores.

“We look forward to working closely with our landlords to determine the best path forward for each of our stores,” said Stein.

 

Read more about:

Rite Aid

About the Author

Bill Wilson

Senior editor at Supermarket News

Bill Wilson is the senior editor at Supermarket News, covering all things grocery and retail. He has been a journalist in the B2B industry for 25 years. He has received two Robert F. Boger awards for his work as a journalist in the infrastructure industry and has over 25 editorial awards total in his career. He graduated cum laude from Southern Illinois University at Carbondale with a major in broadcast communications.

Stay up-to-date on the latest food retail news and trends
Subscribe to free eNewsletters from Supermarket News

You May Also Like