Recently, according to media reports, Rite Aid, the third-largest drugstore chain in the United States, is preparing to seek bankruptcy protection and may close 400 to 500 stores. The company is reportedly burdened with over $3.3 billion in debt and is facing over 1,000 federal lawsuits accusing it of contributing to the opioid crisis through excessive drug supply.
Currently, Rite Aid is in negotiations with its creditors, considering filing for bankruptcy protection and closing approximately a quarter of its 2,100 stores. Earlier reports stated that two groups of creditors of Rite Aid were negotiating the number of stores to be sold, with one group willing to sell more stores than proposed.
In a statement, Rite Aid mentioned that it would “continue to work constructively with our financial stakeholders to determine the best path forward to reduce debt and ensure ongoing success of the business.” Additionally, the company stated that no decisions have been made regarding the next steps.
Media reports state that Rite Aid has struggled in comparison to its competitors CVS and Walgreens over the years. The company has experienced weak sales and heavy debt burden. As of June 3rd, the debt burden was approximately $3.3 billion, and the company stated that it did not have sufficient cash to repay these debts. Now, the company is either considering selling the remaining stores or allowing the creditors to take over these stores.