Rite Aid Files for Chapter 11 Bankruptcy Again

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News Summary

Rite Aid has filed for Chapter 11 bankruptcy for the second time in less than two years, continuing to face significant challenges in the retail and healthcare sectors. The company is selling pharmacy assets from over 1,000 locations, with CVS Pharmacy being the largest buyer. Rite Aid’s operational footprint has drastically reduced, with a plan to close at least 142 stores. High debt levels, legal issues, and intense competition are contributing factors to its struggles. The bankruptcy court will review asset sales soon, while some locations are being repurposed for residential development.

Philadelphia – Rite Aid has filed for Chapter 11 bankruptcy for the second time in less than two years, as the retail and healthcare industries continue to present significant challenges for the company. Following the filing, Rite Aid has announced plans to sell pharmacy assets from over 1,000 of its locations to competitors including CVS Pharmacy, Walgreens, Albertsons, Kroger, and Giant Eagle.

As of May 2025, Rite Aid operates approximately 1,240 stores across 15 states, a steep drop from nearly 2,500 stores just two years prior. The sales agreement facilitates the acquisition of prescription files for more than 600 Rite Aid stores by CVS Pharmacy, which emerged as the largest buyer in this transition. This move is intended to allow customers to continue accessing pharmacy services during the changeover and provides job preservation for some employees involved.

Despite these efforts, Rite Aid has issued warnings regarding potential job cuts as a direct consequence of the bankruptcy filing. The company’s headquarters, located in the Philadelphia Navy Yard and encompassing around 66,000 square feet, is now available for lease as part of ongoing restructuring efforts.

The financial troubles faced by Rite Aid are rooted in high debt levels, including nearly $4 billion in liabilities. Contributing factors include ongoing legal battles tied to opioid prescriptions, which have further strained the company’s finances. As Rite Aid moves forward with its restructuring, it plans to close at least 142 store locations, representing over 10% of its operational sites.

In recent years, retail competition has intensified, particularly from larger chains such as CVS Pharmacy and Walgreens. Rite Aid’s struggles, marked by diminishing market share, have also been exacerbated by a broader trend affecting many pharmacy chains, challenged by the increasing presence of online retailers and rising operational costs.

The ongoing economic downturn, primarily driven by the COVID-19 pandemic, has delivered a significant blow to Rite Aid. Increasing incidents of shoplifting and inventory shrinkage have further complicated the company’s ability to sustain profitable operations. Rite Aid’s recent acquisition of Bartell Drugs in 2020 is now turning into a liability, as many of these stores will be sold amid the bankruptcy proceedings. Experts speculate that the famed Bartell brand may not endure the transition to CVS and other competing chains.

Currently, Rite Aid is in the process of having the asset sales approved by the bankruptcy court, with a hearing scheduled for May 21. The company has also been exploring options for repurposing its retail locations. Notably, redevelopment projects are underway in Philadelphia, where OCF Realty is planning to convert a former Rite Aid site into residential condominiums and single-family homes. This reflects a shift in how communities are responding to the reduction of retail spaces in favor of housing developments.

The real estate market views Rite Aid’s remaining property holdings as highly desirable due to their prime locations. Some former Rite Aid locations have already been successfully transitioned to various other retailers such as Dollar Tree, AutoZone, and Napa Auto Parts, showcasing the ongoing interest in these properties despite the challenges faced by the company.

Rite Aid’s decline highlights significant struggles within the pharmacy sector as retail dynamics shift and competition grows. The company’s financial restructuring and asset reductions underscore a critical juncture for the once-prominent brand as it navigates an increasingly challenging marketplace.

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Additional Resources

• CNN
• Seattle Times
• USA Today
• Healthcare Dive
• Wikipedia: Rite Aid