Inflation and evolving market dynamics have posed challenges to multiple sectors in the US. Hailing from the pharmacy vertical, a Pennsylvania-based drugstore chain has filed for Chapter 11 bankruptcy. This marks Rite Aid’s second bankruptcy filing since 2023.
Highlights
- Rite Aid filed for Chapter 11 bankruptcy in the US Bankruptcy Court for the District of New Jersey.
- The drugstore brand had previously petitioned for bankruptcy in 2023 and emerged as a private company after the process.
- Rite Aid will keep its 1,250 outlets open for buyers throughout this round of bankruptcy proceedings.
Rite Aid Files for Chapter 11 Bankruptcy
Popular drug retail store Rite Aid is struggling to stay afloat amid a range of looming challenges in the pharmacy retail sector. The effect is such that the drugstore chain filed for Chapter 11 bankruptcy on May 5. Rite Aid cited reorganizing business operations for the filing in the U.S. Bankruptcy Court for the District of New Jersey.
According to Reuters, the drugstore chain has listed liabilities in the range of $1 billion to $10 billion. Additionally, Rite Aid is hunting for a buyer to sell all of its assets to.
As of now, across 15 states, the drugstore giant has about 1,250 stores. To keep the stores operational for buyers during the process, the pharmacy retailer has secured about $1.94 billion in financing. Moreover, Rite Aid is focused on transferring customer prescriptions to other pharmacy outlets to ensure continuity of care.
What Have the Drugstore Chain’s Officials Said?
Against the backdrop of a bankruptcy filing, Rite Aid’s CEO, Matt Schroeder, stated that the drugstore brand aims to continue serving its customers during the restructuring process. Though the pharmacy establishment is facing financial issues, Rite Aid is working to preserve the jobs of its employees.
The Pharmacy Retailer’s Previous Bankruptcy Battle in 2023
Rite Aid had previously filed for bankruptcy about two years ago when it incurred a loss of $750 million in the fiscal year of 2022. During that time, the pharmacy retail giant was able to cut a $2 billion debt through the Chapter 11 bankruptcy filing.
In addition to this, Rite Aid shut down hundreds of outlets and sold Elixir Solutions, its pharmacy benefit company. The drugstore chain was also able to sort out lawsuits regarding doubtful prescriptions for addictive opioid painkillers.
However, the drugstore giant still owed $2.5 billion in debt after coming out of bankruptcy and becoming a private company in 2024. Seven months after this development, Rite Aid filed for bankruptcy in May 2025.
It should be noted that while the pharmacy retail brand used to operate nearly 2,000 outlets in 2023, it now has only about 1,250 stores in the country.
Views of Experts on Retail Aid’s Current Bankruptcy Filing
Sharing his views about the ongoing troubles of Rite Aid, GlobalData’s managing director, Neil Saunders, felt that the situation was foreseeable. This is because Saunders thinks the drugstore brand has not secured adequate inventory for stocked shelves.
Rite Aid Sold Off Around 2000 Stores After Deal with Walgreens
In its journey of more than six decades, Rite Aid has emerged as a standalone drugstore giant in the country. With 1,240 nationwide outlets, it is also the seventh-largest pharmacy. However, its battles with bankruptcy shed light on Rite Aid’s diminishing stature.
In 2017, Rite Aid sold 2,186 stores to Walgreens Boots Alliance for $5.175 billion.
A second bankruptcy filing within two years throws light on Rite Aid’s struggling finances. Although its stores will stay open for buyers, the drugstore chain’s future depends on successful asset sales and operational adjustments.
