PHILADELPHIA -- Rite Aid is once again seeking bankruptcy protection, marking its second filing in less than two years, as the beleaguered drugstore chain attempts to sell substantially all of its assets. The announcement was made on Monday, May 5, 2025, with the company stating that its stores will remain operational during the Chapter 11 bankruptcy proceedings.
In a bid to ensure continuity for customers, Rite Aid has committed to facilitating the transfer of customer prescriptions to other pharmacies throughout this process. The company has also secured $1.94 billion in new financing to help sustain operations during the sale and bankruptcy proceedings.
Rite Aid's troubles are not new. The company initially filed for bankruptcy protection in October 2023, aiming to restructure its business and alleviate its crushing debt burden. At that time, Rite Aid operated more than 2,300 stores across 17 states. The initial bankruptcy filing allowed the company to cut $2 billion in debt and resolve various legal issues, including litigation related to its handling of opioid prescriptions.
After nearly a year in bankruptcy, Rite Aid emerged in September 2024 as a private company owned by its creditors, having reduced its store count to 1,245 locations in 15 states. Despite this restructuring, the company has continued to struggle. In March 2025, a spokeswoman stated that Rite Aid was "laser focused" on its retail pharmacies, yet reports from stores have revealed empty shelves and a lack of essential products, raising concerns about the chain's ability to attract and retain customers.
Neil Saunders, managing director of GlobalData, highlighted the ramifications of the store's condition, stating, "They're actively pushing customers away." This sentiment reflects a broader struggle faced by Rite Aid and its competitors, including Walgreens and CVS, as they navigate an increasingly challenging retail environment.
Rite Aid's CEO, Matthew Schroeder, expressed concern over the company's financial challenges, which have been exacerbated by a rapidly evolving retail and healthcare landscape. In a letter to employees, he noted, "While we have continued to face financial challenges, we are encouraged by meaningful interest from a number of potential national and regional strategic acquirers."
As part of its latest bankruptcy proceedings, Rite Aid has announced job cuts at its corporate offices in Pennsylvania due to its inability to secure additional capital from lenders. The company is actively pursuing a strategic sale process for its assets, with plans to minimize disruptions for employees and customers.
Rite Aid's history is punctuated by significant challenges, including a failed merger with Albertsons in 2018 and a previous acquisition attempt by Walgreens, which at one point offered $17 billion for the chain. Ultimately, Walgreens acquired less than 2,000 Rite Aid locations in a deal valued at $4.4 billion after antitrust concerns limited the scope of the merger.
The current bankruptcy proceedings come amid a broader trend affecting pharmacy chains, as they grapple with declining prescription reimbursements, increased competition from discount retailers and online shopping, and rising theft. Walgreens has recently agreed to be taken private in a deal valued at up to $24 billion, while CVS has closed over 1,000 stores and undergone significant layoffs.
As Rite Aid navigates this tumultuous period, the company remains committed to its customers and employees, promising uninterrupted pharmacy services and support for its associates. Rite Aid's CEO concluded, "With their support, we have played a critical role in supporting the healthcare needs of countless Americans across the communities that we are honored to serve."
The implications of Rite Aid's financial struggles extend beyond the company itself, raising concerns about the emergence of "pharmacy deserts"—areas where residents lack access to local pharmacies for essential medications. U.S. lawmakers and trade groups have voiced alarm over the potential impact of pharmacy closures on community health.
As the situation unfolds, Rite Aid's future remains uncertain, but the company is poised to pursue strategic options that may reshape its operations and presence in the retail pharmacy landscape.
