Fate of Beacon drugstore uncertain
Rite Aid is again seeking bankruptcy protection as the struggling drugstore chain says it will try to sell its assets, meaning its Beacon location will close unless the company can find a buyer.
Rite Aid has 1,245 stores in 15 states. It will return to Chapter 11 bankruptcy and immediately begin selling locations and assets.
“While we do not yet know what the outcome of this process will be, we are in active discussions with multiple potential buyers,” Rite Aid said in a statement. “It is important to note, however, that any store operations or assets we do not sell through this process will no longer be owned or operated by Rite Aid. This means that over the next few months, all Rite Aid distribution centers will close, and all stores will either close or be operated by a new owner. During this process, customers can continue to access pharmacy services and products, including prescriptions and immunizations, both in stores and online.”
The chain said it has lined up $1.94 billion in financing that will help fund it through the sale and bankruptcy proceedings.
Rite Aid filed for bankruptcy protection in October 2023, with plans to sell parts of its business and restructure. Before the filing, it ran more than 2,300 stores in 17 states. Rite Aid said its initial voluntary Chapter 11 filing would allow it to slash debt and resolve litigation. The company sold its relatively small pharmacy benefits management business, Elixir Solutions, for $576 million.
Rite Aid emerged from Chapter 11 nearly a year later as a private company owned by its creditors. A spokesperson said in March that the company was “laser focused” on its retail pharmacies, including restocking its stores. But in early May, empty white shelves dotted a store that sits a few miles from Rite Aid’s corporate headquarters in Philadelphia.
Retail analyst Neil Saunders said such a look encourages shoppers not to return. “They’re actively pushing customers away,” said Saunders, managing director of the consulting and data analysis firm GlobalData.
It’s a tough environment for drugstores. Prescription profitability has grown tight. Chains also are dealing with increased theft, court settlements over opioid prescriptions and shoppers who are drifting to online shopping and discount retailers. Walgreens, which has more than six times as many stores as Rite Aid, agreed in March to be acquired by the private equity firm Sycamore Partners.
Rite Aid, founded in 1962 in Scranton, Pennsylvania, as Thrif D Discount Center, also explored sale offers. Walgreens attempted to buy it for about $9.4 billion a decade ago, when Rite Aid ran more than 4,600 stores. But the larger drugstore chain eventually scaled back its ambition and bought less than half that total to get the deal past antitrust regulators. In 2018, Rite Aid called off a separate merger with the grocer Albertsons.
Jonathan Poet of the AP contributed to this report from Philadelphia.
