Rite Aid, the Philadelphia-based pharmacy chain, has filed for bankruptcy protection for the second time in two years, seeking buyers for its assets. This latest Chapter 11 filing, made on May 5, 2025, comes as the company grapples with ongoing financial difficulties exacerbated by competition from retail giants like Walmart and Amazon.
In a court filing, Rite Aid disclosed that it has estimated assets and liabilities ranging between $1 billion and $10 billion. This move follows a previous bankruptcy in 2023, which allowed the company to cut $2 billion in debt, close hundreds of underperforming stores, and resolve numerous lawsuits related to its handling of opioid prescriptions.
Despite these previous efforts, Rite Aid emerged from its last bankruptcy in September 2024 with $2.5 billion in bank loans, which have since depreciated in value as the company has struggled to meet its post-bankruptcy projections. According to CEO Matt Schroeder, who took the helm just eight months ago, the company continues to face significant financial challenges, stating, "For more than 60 years, Rite Aid has been a proud provider of pharmacy services and products to our loyal customers." He emphasized that the company’s priority is to continue serving its customers during this tumultuous period.
Rite Aid's current predicament reflects broader trends affecting pharmacy chains across the United States. With falling drug margins and increasing competition from online retailers, traditional pharmacy models are under severe strain. Walgreens, another major player in the sector, recently agreed to a $10 billion buyout by private equity firm Sycamore Partners, a stark decline from its $100 billion valuation a decade ago.
As Rite Aid navigates its second bankruptcy, it has secured commitments for $1.94 billion in new financing from existing lenders, which, alongside cash from operations, is expected to provide sufficient funding during the sale process. The company has also begun efforts to transfer customer prescriptions to other pharmacies, ensuring that employees involved in this transition will continue to receive pay and benefits.
During its previous bankruptcy, Rite Aid was able to negotiate settlements with lenders and its drug distribution partner, McKesson, while also addressing legal issues related to its opioid prescription practices. The company faced numerous lawsuits alleging that it ignored red flags when filling prescriptions for addictive pain medications.
Since emerging from bankruptcy, Rite Aid has reduced its store count significantly, operating approximately 1,250 pharmacies across the U.S. in 2025, down from about 2,000 in 2023. This reduction has been particularly notable in key markets such as Ohio and Michigan, where the company has closed numerous locations.
As Rite Aid moves forward with its restructuring plans, it remains to be seen how the company will adapt to the rapidly evolving retail and healthcare landscapes. The pharmacy chain's efforts to find buyers for its assets come at a time when many consumers are increasingly turning to online shopping for their pharmaceutical needs, further complicating the traditional brick-and-mortar business model.
The current bankruptcy filing is a developing story, and updates will be provided as more information becomes available. Rite Aid's situation serves as a cautionary tale for other pharmacy chains navigating the complexities of a changing market, highlighting the need for innovation and adaptation in the face of fierce competition.
