PHILADELPHIA — Rite Aid is exploring a second Chapter 11 bankruptcy filing less than a year after completing a major financial restructuring. The move comes as the drugstore chain struggles to find a sustainable path forward despite efforts to cut costs and streamline operations.
According to the Wall Street Journal, sources familiar with the matter say the Philadelphia-based company is evaluating a range of options, including a sale of part or all of its business, in a bid to avoid another bankruptcy. Rite Aid has enlisted the law firm Paul Weiss to advise on potential next steps. If a sale does not materialize—either within or outside of bankruptcy—the company may be forced to shut down additional stores or even liquidate more of its operations.
Rite Aid filed for Chapter 11 bankruptcy protection in October 2023, citing $750 million in losses and $24 billion in revenue for the fiscal year ending March 2023. At the time, it operated over 2,000 stores and employed around 47,000 people. It emerged from bankruptcy as a private company, having closed hundreds of locations and sold its pharmacy benefits manager, Elixir. The company also reached settlements with creditors, including drug distribution partner McKesson.
Despite those measures, Rite Aid now operates roughly 1,300 stores and remains a distant third in the U.S. pharmacy retail market, behind Walgreens and CVS. The industry has seen significant shifts recently, including a leveraged buyout of Walgreens by Sycamore Partners.
Rite Aid’s continued instability stems from a range of challenges, including legal liabilities from opioid-related lawsuits. Last year, the company reached a settlement with the U.S. Department of Justice over allegations it filled unlawful prescriptions violating the False Claims Act and the Controlled Substances Act.
Rite Aid has not yet issued a public comment in response to the recent reports.
