(WJET/WFXP) — Rite Aid has filed for bankruptcy again, less than a year after exiting its first.
Bloomberg, citing a letter sent to employees by Rite Aid CEO Matthew Schroeder, reported Monday that Rite Aid intended to file for bankruptcy despite completing its recent restructuring plan. Court filings show Rite Aid filed for voluntary Chapter 11 proceedings on Monday.
In September, Rite Aid formally emerged from bankruptcy. The company had filed for Chapter 11 bankruptcy protection in late 2023 and closed nearly 800 stores as part of the process.
Will stores be closing?
It wasn’t yet known if more stores would close as part of the latest anticipated bankruptcy filing, though the restructuring website dedicated to the case reported Rite Aid is pursuing “a sale of its prescriptions, pharmacy and front-end inventory, and other assets.”
A press release states customers “can continue to access pharmacy services and products in stores and online” while “Rite Aid [works] to facilitate a smooth transfer of customer prescriptions to other pharmacies.”
“The majority of our stores will remain open and operating for the next few months where you can continue to access pharmacy services and products in stores and online, including prescriptions and immunizations,” the company added.
Letter indicates some ’employee separations’
In the letter to associates posted on Reddit, Schroeder said Rite Aid would make “employee separations in connection with the closing of certain facilities.” The letter listed the Rite Aid Valley Green Office Facility in Etters, Pennsylvania, and the Rite Aid Collaboration Center in Philadelphia.
“This action is expected to be permanent, and regretfully, we eventually will cease all operations at the facilities, with the first round of ongoing separations to commence on May 5, 2025,” the letter continued.
Other Reddit users claimed to receive notices that their Rite Aid store would close in the coming weeks. Rite Aid did not immediately respond to Nexstar’s request for comment or confirmation of any closures.
Economic downturn, ‘possible litigations’ blamed
Schroeder went on to explain that while Rite Aid was “actively seeking capital,” efforts had been unsuccessful. “Rite Aid only recently received notice from a significant vendor shortening and restricting payment terms, which could cause Rite Aid’s loan to our lenders to be accelerated.”
Court documents associated with Rite Aid’s previous bankruptcy, submitted Monday, accused the company of failing to make more than $32,400 in post-petition payments to Cape Sales, a merchandise company.
Schroeder’s letter claims lenders have informed Rite Aid they will no longer receive funding to “cover payroll and employment related expenses if we retain the entirety of our current workforce.”
Schroeder also cited a dramatic downturn in the economy, with increased costs (including those caused by the recent tariffs) and possible litigations, which have necessitated employee terminations, which, they say, were unforeseen.
After confirming Rite Aid will “commence cases under chapter 11” bankruptcy protection, Schroeder wrote, “We truly regret that this action is necessary.”
Ahead of its first bankruptcy filing, Rite Aid had been reporting annual losses for several years and faced financial risks from lawsuits over opioid prescriptions. At the time, the company had over 2,000 stores, primarily across the East and West Coasts.
As of Monday, 1,240 Rite Aid stores remain open.
