Rite Aid is seeking to sell “substantially all its assets” and has initiated Chapter 11 bankruptcy proceedings for the second time in less than two years to facilitate the process.
The company is in active discussion with multiple interested potential acquirers, according to a May 5 news release.
Rite Aid CEO Matt Schroeder said in the release that the pharmacy chain has continued to face financial challenges “intensified by the rapidly evolving retail and healthcare landscapes in which we operate.”
During the process, Rite Aid customers will continue to be able to access pharmacy services and products in stores and online. Rite Aid is working to “facilitate a smooth transfer” of customers’ prescriptions to other pharmacies. Rite Aid employees helping with this process will continue to receive pay and benefits.
“As we move forward, our key priorities are ensuring uninterrupted pharmacy services for our customers and preserving jobs for as many associates as possible,” Mr. Schroeder said in the release.
To support the company during the sale process, Rite Aid has secured commitments from certain existing lenders to access $1.94 billion in new financing. Rite Aid intends to divest or monetize any assets that are not sold through the court-supervised sale process.
Amid its bankruptcy process, Rite Aid is laying off more than 2,000 employees in Pennsylvania and New Jersey, according to WARN notices.
The company laid off 501 employees in Etters, Pa., effective May 5 and plans to lay off 595 at its corporate headquarters in Philadelphia, effective June 4. Rite Aid is laying off 1,122 employees throughout New Jersey on a rolling basis beginning June 4.
Rite Aid filed for Chapter 11 bankruptcy protection in October 2023. The company completed financial restructuring and emerged from bankruptcy in September. Throughout its Chapter 11, Rite Aid cut around $2 billion in debt and received around $2.5 billion in exit financing. It also closed more than 520 stores. Rite Aid currently has 1,240 stores in the U.S.
