Rite Aid Files for Second Bankruptcy in Less Than Two Years, Plans to Sell Business

Rite Aid, one of the largest drugstore chains in the United States, has filed for Chapter 11 bankruptcy protection for the second time in less than two years. The company announced its plans to sell the business amid ongoing financial challenges and a rapidly evolving retail and healthcare landscape.

Bankruptcy Filing and Sale Plans

Rite Aid CEO Matt Schroeder revealed on Monday that the company has filed for bankruptcy with intentions to sell itself. The drugstore retailer has already received "meaningful interest" from potential national and regional strategic buyers. Despite the filing, Rite Aid stores will remain open and operational during the court-supervised Chapter 11 process.

To support its operations during this transition, Rite Aid has secured commitments from existing lenders for $1.94 billion in new financing. The company expects this funding, combined with cash from ongoing operations, to be sufficient to sustain the business throughout the sale process and bankruptcy proceedings.

Recent Financial Struggles

This latest bankruptcy filing comes just eight months after Rite Aid emerged from its previous Chapter 11 restructuring in September. The company's prior bankruptcy, filed less than two years ago, resulted in Rite Aid becoming a private business and shedding approximately $2 billion in debt. Additionally, the company secured $2.5 billion in exit financing at that time.

CEO Schroeder, who assumed his role during the company's exit from the previous bankruptcy, acknowledged the persistent financial challenges faced by Rite Aid. He cited the "rapidly evolving retail and healthcare landscapes" as factors intensifying these difficulties.

Customer and Employee Considerations

As Rite Aid navigates through this latest restructuring, the company has emphasized its commitment to serving customers and supporting employees. Efforts are underway to transfer customer prescriptions to other pharmacies, ensuring continuity of care. Employees assisting with this transition will continue to receive pay and benefits, according to the company's press release.

Schroeder reiterated Rite Aid's longstanding commitment to its customers, stating, "For more than 60 years, Rite Aid has been a proud provider of pharmacy services and products to our loyal customers."