Is Rite Aid Closing All Stores? Here’s What To Know As Second Bankruptcy Filed

Rite Aid is closing many locations across the country as it prepares to file for bankruptcy. CEO Matthew Schroeder notified employees in a letter, saying the company is forced to close after failing to receive the additional capital it needs from lenders to continue running the business. According to Bloomberg, the company will also cut jobs at its corporate offices.

Why is Rite Aid Filing for bankruptcy?

Rite Aid is struggling to survive while facing an increasing challenge from online stores, as well as debt and a declining cash flow. Schroeder, according to Bloomberg, added that “the dramatic downturn in the economy,” exacerbated by tariffs and increasing costs from suppliers, has forced the company to make job cuts. The CEO said in his letter that Rite Aid lenders can’t cover employment-related expenses if the company retains the entirety of its workforce.

Rite Aid first filed for Chapter 11 in 2023 and cut $2 billion in debt. The retail store, which closed 850 locations at that time and transferred control of the company to lenders, bounced back from bankruptcy in September. At that time, the company said it had been revamped with “significantly less debt and additional financial resources.” Still, Rite Aid faced more than $2 billion in debt while struggling with inflation and weaker demand.

How many Rite Aid locations will be closed?

179 locations are closing right now. While closing these locations, Rite Aid still operates 1,200 stores. However, the future of the business in its entirety still remains murky, WIBX reported.

And as Bloomberg noted in their report, Schroeder “told employees that all Rite Aid stores would either be closed or sold, according to people familiar with the situation. The company is working with several regional and national buyers who might be interested in parts of the company.”

What’s happening to Rite Aid and its competitors like Walgreens and CVS?

America’s second-largest pharmacy, Walgreens, is also facing financial troubles in the current economy. The pharmacy, according to WIBX, plans to cut 1,200 locations by 2028. Private equity firm Sycamore Partners recently purchased the chain for $23.7 billion. CVS is also planning to close many of its locations.