Pharmacy chain Rite Aid announced it has filed for Chapter 11 bankruptcy, which will likely result in the closure of a number of locations.
In a statement released by the chain on Sunday, Rite Aid said it intends to close additional under-performing stores. It currently has about 2,100 locations in 17 states.
Also on Sunday, Rite Aid announced Jeffrey S. Stein as its new CEO.
“The court-supervised process provides Rite Aid with legal tools to accelerate our footprint optimization in an efficient and orderly manner. We look forward to working closely with our landlords to determine the best path forward for each of our stores," Stein said in a statement.
Rite Aid has seen its national footprint decline significantly in recent years. In 2016, the chain had over 4,600 stores in 31 states.
Rite Aid has also faced multiple lawsuits over its role in the opioid crisis. Earlier this year,the Department of Justice said Rite Aid "knowingly filled unlawful prescriptions for controlled substances."
“We allege that Rite Aid filled hundreds of thousands of prescriptions that did not meet legal requirements,” said U.S. Associate Attorney General Vanita Gupta. “According to our complaint, Rite Aid’s pharmacists repeatedly filled prescriptions for controlled substances with obvious red flags, and Rite Aid intentionally deleted internal notes about suspicious prescribers. These practices opened the floodgates for millions of opioid pills and other controlled substances to flow illegally out of Rite Aid’s stores.”
During its restructuring, Rite Aid said it has received a commitment for $3.45 billion in new financing from its lenders. These funds, Rite Aid said, will provide the company with enough liquidity to remain operational during the bankruptcy process.
The company estimated in June that its net loss for fiscal year 2024 would be between $650 million and $680 million.
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