News Summary
Rite Aid has declared Chapter 11 bankruptcy for the second time in under two years, leading to the closure of all 178 stores in New York State. The company aims to restructure while continuing to provide pharmacy services during the transition. Layoffs are expected as financial troubles persist, with a significant loss of $750 million reported. Rite Aid plans to preserve some operations post-bankruptcy and remains committed to supporting its employees and communities.
New York, NY – Rite Aid has filed for Chapter 11 bankruptcy protection for the second time in under two years, a move that will result in the closure of all 178 of its stores in New York State. The filing took place in the U.S. Bankruptcy Court for the District of New Jersey. As part of its restructuring efforts, Rite Aid is pursuing a strategic and value-maximizing sale process for substantially all of its assets.
Despite the bankruptcy filing, Rite Aid will continue to provide pharmacy services and products during this transition period. Customers can expect support in transferring their prescriptions to other pharmacies as locations begin to close. Additionally, effective May 6, 2025, Rite Aid will no longer issue rewards points for qualifying purchases, and gift cards will only be accepted until June 4, 2025.
Layoffs at Rite Aid are set to begin on June 4, 2025, as part of the fallout from the company’s financial struggles. Chief Executive Officer Matthew Schroeder attributed the challenges to a downturn in the economy, ongoing litigation issues, increased costs from suppliers and landlords, and unexpected employee separations. Rite Aid’s financial situation has deteriorated to such a degree that it reported $750 million in losses for the last fiscal year.
Rite Aid initially entered bankruptcy in October 2023 and emerged from its first bankruptcy filing in September 2024 as a private company, having cut $2 billion in debt and secured $2.5 billion in exit financing. At the time of its first bankruptcy, Rite Aid operated over 2,300 stores nationwide; however, that number has now dropped to fewer than 1,250 as the company faces ongoing financial difficulties.
The current bankruptcy and subsequent store closures are believed to be predictable outcomes, with many landlords in Long Island expressing concerns about Rite Aid’s financial stability prior to the announcement. The pharmacy chain is also facing over 1,000 lawsuits regarding its perceived role in the opioid epidemic, including a significant case in Ohio. In addition, Rite Aid has pointed to a surge in thefts after the pandemic as a contributing factor to its financial woes.
Rite Aid aims to ensure the continuity of pharmacy services for its customers throughout this turbulent transition and has indicated that while many locations will close, some stores may still operate under new ownership once the bankruptcy proceedings are complete. The company is focused on preserving as many jobs as possible during the restructuring, underscoring its commitment to its employees and the communities it serves.
As Rite Aid navigates this challenging landscape, stakeholders and customers alike will be watching closely to see how the restructuring efforts unfold and what the future holds for the long-standing pharmacy chain that has become a fixture in communities across the country.
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Additional Resources
- AMNY: Rite Aid to Close Remaining New York Stores
- Wikipedia: Rite Aid
- NJ.com: Rite Aid Closing All 178 Locations in NY
- Google Search: Rite Aid Chapter 11 Bankruptcy
- WKBW: Rite Aid to Close All Locations in New York State
- Google Scholar: Rite Aid closures
- Spectrum Local News: Rite Aid to Close About 177 Pharmacies Across New York
- Encyclopedia Britannica: Rite Aid
- WBNF: Rite Aid Closing New York Stores
- Google News: Rite Aid Store Closures
