Rite Aid seeking buyout as it files for bankruptcy—again
Rite Aid announced it has once again filed for bankruptcy, marking its second time in less-than two years. Now, the struggling pharmacy chain says it's seeking a buyer.
In a statement, the company said it is seeking Chapter 11 bankruptcy protections in an effort to facilitate a “strategic and value-maximizing sale” of "substantially all of its assets." Rite Aid said it intends to effectively liquidate its assets through a sale, using Section 363 of the U.S. Bankruptcy Code.
To help with debt management, the company said it has “commitments from certain of its existing lenders” for upwards of $1.95 billion in funding. Along with cash earned from its normal business, the money is expected to be enough to keep the company afloat during bankruptcy proceedings, Rite Aid confirmed.
It added that the plan is to “divest or monetize any assets that are not sold through the court-supervised process.” Effectively, the company as it exists is preparing to go out of business, and the future of its core retail business remains uncertain. However, for now, it's keeping its online and physical pharmacy operations open, while alluding to a total shutdown as the bankruptcy moves forward.
Rite Aid has already closed hundreds of stores over the past couple of years.
“While we have continued to face financial challenges—intensified by the rapidly evolving retail and healthcare landscapes in which we operate—we are encouraged by meaningful interest from a number of potential national and regional strategic acquirers,” Matt Schroeder, Chief Executive Officer of Rite Aid, said in a statement.
The potential buyers were not listed and their interest in the business is presently unknown.
Customers promised a 'smooth transfer'
Rite Aid promised that it would work to ensure patients’ access to drugs is not interrupted as stores are potentially shuttered. The plan is to transfer prescriptions to other pharmacies, including those of competitors.
Rite Aid added that employees will be necessary to ensure a “smooth” transition process for customers, and those who assist will have their pay and benefits maintained, as the company said it's seeking ways to preserve as many jobs as possible.
“I will be forever grateful to our thousands of associates for their commitment to Rite Aid and its mission, and I thank our entire team—from store associates to corporate employees—for their dedication to our customers and our company," Schroeder said. "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."
Rite Aid has been in business for more than 60 years, founded under the name Thrift D Discount Center in 1962. Its first location was in Scranton, Pennsylvania. It expanded and went public—changing its name to Rite Aid—in 1968.
It first filed for Chapter 11 bankruptcy in September 2023, emerging a year later as a private company with a slimmer business and an influx of investor cash. However, it’s been unable to right the ship.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.