What the Rite Aid Bankruptcy Means for You

Rite Aid, the Philadelphia-based drugstore chain with 2,100 retail pharmacy locations across 17 states, filed for Chapter 11 bankruptcy protection over the weekend, as opioid lawsuits and years of playing second fiddle to CVS and Walgreens finally took their toll. The bankruptcy filing comes as all of the nation’s drugstore chains are facing increased competition from Amazon, Walmart, Target and Costco, all of which sell drugstore items and fill prescriptions, sometimes more cheaply. 

Rite Aid isn’t shutting down completely but will close underperforming stores. The company has proposed closing roughly 400 to 500 stores in the bankruptcy, according to a Wall Street Journal report. In the first three months of this year, Rite Aid closed 25 stores. Since 2021, it has shut down 180 locations. The drugstore company did not say how many stores it will be left with following the restructuring or where the closings will occur.

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As part of its bankruptcy filing, Rite Aid said it had reached an agreement to restructure the company and has received $3.45 billion in new financing to support its operations. The company also named Jeffrey S. Stein as its new CEO. Stein said in prepared remarks that the bankruptcy will enable Rite Aid to move ahead as a stronger company. 

Rite Aid, Walmart, CVS and Walgreens have all been the target of lawsuits over how they filled prescriptions for highly addictive opioid painkillers. In March, the U.S. Department of Justice filed a lawsuit against Rite Aid, alleging that from May 2014 to June 2019, it had filled hundreds of thousands of prescriptions for opioids knowing they were illegally obtained. Walmart, CVS and Walgreens have already announced multibillion-dollar settlements over similar allegations.