May 5 (UPI) — Rite Aid on Monday announced it is filing for bankruptcy and looking for a new buyer, just seven months after exiting Chapter 11.
Eighteen months ago, Rite Aid first filed for bankruptcy in October 2023 because it couldn’t compete against bigger chains and paid millions for filling unlawful opioid prescriptions. The company plans to keep open its 1,350 stores in 15 states with 4,000 employees.
“For more than 60 years, Rite Aid has been a proud provider of pharmacy services and products to our loyal customers,” Matt Schroeder, Rite Aid’s CEO, said a statement. “While we have continued to face financial challenges, intensified by the rapidly evolving retail and healthcare landscapes in which we operate, we are encouraged by meaningful interest from a number of potential national and regional strategic acquirers.
“As we move forward, our key priorities are ensuring uninterrupted pharmacy services for our customers and preserving jobs for as many associates as possible.”
Rite Aid secured $1.9 billion in new financing, along with cash from operations, and is expected to provide sufficient funding during the sale and court-supervised process,” according to a Rite Aid release.
The company intends to divest or monetize any assets not sold through the court-supervised process.
During the first Chapter 11 process, the company slashed $2 billion in debt, secured $2.5 billion in funds to keep operating and closed about 500 locations.
Rite Aid, which is headquartered in Philadelphia, had revenue of $24.06 billion in 2023 but a $750 million net loss, according to its filing.
Rite Aid is the third-largest nationwide standalone pharmacy chain in the United States far behind CVS’s 9,118 and Walgreens with 8,363. CVS also has 1,865 retail pharmacies within retail chains and approximately 80 clinics in Target stores.
When counting big box chains, such as Walmart, it is the seventh-largest pharmacy in the United States. Also Amazon is now selling prescription drugs.
In 2015, Walgreens offered $17 billion to acquire the company, but U.S. regulators were fearful the combination would violate federal antitrust laws and reduce competition in the market.
In 2017, the companies agreed to a $4.4 billion deal in which Walgreens acquired 1,932 of the 4,000 Rite Aid locations.
Rite Aid’s peak in 2008 was 5,059 stores. Rite Aid opened its first store in 1962 in Scranton, Pa., and now is mainly in New York, California and Pennsylvania.
Walgreens announced in March that it was going private in a deal valued up to $24 billion. The transaction is expected to be finalized later this year.
CVS has closed more than 1,000 stores and undergone thousands of layoffs.