Pharmacy Giant’s Downfall: 53 Stores to Close Across 9 States in the Wake of Bankruptcy

The list of closures began with 154 stores and has grown throughout the bankruptcy proceedings.

California, Maryland Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania, and Virginia are all closing stores.

According to Reuters Rite Aid was granted permission by a bankruptcy court on March 28th to vote on a bankruptcy restructuring that would transfer the majority of equity of the company to its bondholders, while leaving the possibility of a possible sale open.

To reduce debt, the company filed for bankruptcy on October 1. Reuters reported that the filing was intended to close down poorly performing locations and sell off “non-core business units”.

Rite Aid denies any wrongdoing but is still working on some settlements that are considered crucial to the restructuring process. This includes an agreement relating to a Justice Department investigation of the pharmacy’s opioid sales.

Lawyers for the company have said that they are ready to ask bondholders for votes, as this is the most important voting group in the bankruptcy.

The bondholders must vote by Monday.

A Rite Aid representative said in an email, “The company does not give the media a list with the stores scheduled to close but we informed the court about certain underperforming stores we are closing to reduce further rent expenses and strengthen overall financial results.”

According to WJW TV, the court documents did not include a timeline for the closures.

Rite Aid plans to ask the court for final approval of its restructuring plan on April 22. In January, the bankruptcy court approved its sale of Elixir Pharmacy Benefits, a pharmacy benefit company.

According to the website of the company, Rite Aid opened its first full-service pharmacies in Scranton, Pennsylvania in 1962. It operates approximately 1,700 retail pharmacies in 16 states, with a staff of 45,000.