News Summary

Rite Aid has announced its second Chapter 11 bankruptcy filing in two years, planning to close 178 stores in New York and many others across 15 states. The pharmacy chain has struggled with competition and significant financial distress, leading to immediate layoffs and store closures. As it reorganizes, Rite Aid aims to auction off leases and properties while encouraging customers to transfer prescriptions to alternative pharmacies. The situation continues to evolve as liquidation sales start and further cutbacks are anticipated.

California – Rite Aid has filed for Chapter 11 bankruptcy for the second time in just two years, revealing plans to close stores and auction off leases and properties across 15 states. The company announced that almost all of its 1,240 stores are expected to be offered for sale pending court approval, marking a significant shift for the troubled pharmacy chain.

As part of the initial phase of this bankruptcy process, Rite Aid has identified 47 locations across nine states that will close immediately. Some of the states affected by the closures include California, Connecticut, Massachusetts, New Hampshire, New Jersey, New York, Oregon, Pennsylvania, and Washington. Notably, Rite Aid will close all 178 stores in New York, which includes 11 locations in the Capital Region. The store closures will begin affecting operations in June, with shutdown notices advising customers that gift cards, returns, and exchanges will no longer be accepted starting June 5, 2025.

Employees at the affected stores have begun receiving notifications about impending layoffs, with the first layoffs scheduled to take place on June 4, 2025. The layoffs and closures come as Rite Aid’s CEO, Matthew Schroeder, announced that efforts to secure additional capital to stabilize the company’s operations were unsuccessful, necessitating these significant cutbacks.

The financial struggles facing Rite Aid are significant. The company has faced considerable competition from major retail pharmacy chains including Walmart, CVS, and Walgreens, leading to severe sales declines. Rite Aid previously filed for bankruptcy protection in 2023, which resulted in the closure of numerous other stores. The current filing is a part of a broader strategy to maximize value for creditors while navigating the impacts of the opioid crisis that has harshly affected many pharmacy operations.

In the midst of these operational changes, Rite Aid also plans to sell its prescription files to rival pharmacies, although there is no assurance that these files will be transferred to nearby locations. Customers who currently utilize Rite Aid for their prescriptions are being encouraged to move their prescriptions to alternative pharmacies as soon as possible.

Starting immediately, Rite Aid will stop issuing rewards points, and any accumulated points will expire according to existing terms. Liquidation sales are underway at various locations, and further store closures are anticipated in the months ahead, as the company attempts to reorganize and streamline its operations.

Founded in 1962 in Scranton, Pennsylvania, Rite Aid grew to prominence with more than 5,000 locations at its peak. Recently, however, the company has faced an intensely competitive retail environment, which has critically limited its viability as a pharmacy chain. With the rolling bid deadlines and auctions set to begin in May 2025, managed by A&G Real Estate Partners, the future landscape of Rite Aid remains uncertain.

In summary, as Rite Aid grapples with financial distress, the second bankruptcy filing highlights the considerable challenges facing the pharmacy chain. The planned store closures and layoffs signify a drastic measure to alleviate the company’s burdens while aiming to meet creditor obligations. Customers and employees alike are bracing for significant changes as Rite Aid moves forward in its restructuring efforts.