Rite Aid returns to bankruptcy protection as it seeks to sell most
assets
[May 06, 2025] By
TOM MURPHY
Rite Aid is again seeking bankruptcy protection as the struggling
drugstore chain says it will try to sell substantially all of its
assets.
The company said Monday that its stores will remain open as it returns
to Chapter 11 bankruptcy proceedings.
The company said it will work to ensure that customer prescriptions are
transferred to other pharmacies as it goes through the sale process. The
drugstore chain has lined up from some of its lenders $1.94 billion in
new financing which help fund it through the sale and bankruptcy
proceedings.
The company initially filed for bankruptcy protection in October 2023,
with plans to sell parts of its business and restructure. The company
ran more than 2,300 stores in 17 states before the filing.
Rite Aid said then that its initial voluntary Chapter 11 filing would
allow it to slash debt and resolve litigation. The company sold its
relatively small pharmacy benefits management business, Elixir
Solutions, for around $576 million.
Rite Aid emerged from Chapter 11 nearly a year later as a private
company. The drugstore chain said in a statement that it came out of the
process stronger, “with a rightsized store footprint, more efficient
operating model, significantly less debt and additional financial
resources.”
Rite Aid’s creditors took ownership of the chain, which shrank to 1,245
stores in 15 states, according to its website.
A spokeswoman said in March that the company was “laser focused” on its
retail pharmacies, including restocking its stores.
But in early May, empty white shelves dotted a store that sits a few
miles from Rite Aid’s corporate headquarters in Philadelphia. The only
rolls of wrapping paper in the store were some Christmas-themed
offerings that leaned next to empty shelf space beneath a sign
advertising “Great Value!”
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 The location also had a limited
selection of profitable beauty products and drugstore staples such
as Qtips and cotton balls.
Retail analyst Neil Saunders said such a look encourages shoppers
not to return.
“They’re actively pushing customers away,” said Saunders, managing
director of the consulting and data analysis firm GlobalData.
Rite Aid was attempting to turn around its business in a tough
environment for drugstores. Major chains and independent pharmacies
have been closing stores and struggling with several challenges.
Prescription profitability has grown tight. The chains also are
dealing with increased theft, court settlements over opioid
prescriptions and shoppers who are drifting more to online shopping
and discount retailers.
Walgreens, which has more than six times as many stores as Rite Aid,
agreed in March to be acquired by the private equity firm Sycamore
Partners.
Philadelphia-based Rite Aid was founded in 1962 in Scranton,
Pennsylvania, as Thrif D Discount Center. The company had struggled
with debt, posted annual losses for several years and was cutting
costs and closing stores well before its initial bankruptcy filing.
Rite Aid also explored sale offers.
Walgreens attempted to buy it for about $9.4 billion a decade ago,
when Rite Aid ran more than 4,600 stores. But the larger drugstore
chain eventually scaled back its ambition and bought less than half
that total to get the deal past antitrust regulators.
In 2018, Rite Aid called off a separate merger with the grocer
Albertsons.
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Jonathan Poet contributed to this report from Philadelphia.
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