A new bankruptcy court filing says that grocery store chain Rite Aid is closing 31 more stores in 12 states.
The organization disclosed the closure of over 150 additional stores during its Chapter 11 bankruptcy filing last month. According to a news release on Wednesday, the company manages over 2,300 retail pharmacy locations in seventeen states.
Rite Aid has more than 47,000 employees in 17 states. Employees of the closing stores will be able to move to other nearby areas if they can.
The pharmacy advised customers to check out the Rite Aid in their area to determine if their prescriptions will be safe or need to be moved.
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Reason Behind Rite Aid's Closing Stores
The closures are being implemented in response to poor performance and "to further reduce rent expense and strengthen overall financial performance," according to a spokesperson for Rite Aid who spoke with USA Today.
Approximately half as many active locations exist for the company as a decade ago.
In terms of money, Rite Aid is in a lot worse shape than its rivals. Rite Aid has lost almost $3 billion in the last six years, and its stock is down more than 90% for the year.
Moreover, Rite Aid, the third-largest standalone pharmacy chain in the US, has been facing trouble for a while now. The drug store retail sector is having difficulties competing with Amazon, and big-box stores like Walmart, Target, and Costco are moving into the space and offering more customer-friendly options to the nationwide pharmacy chains.
Its problems were made worse by legal issues that came from being accused of giving customers illegal opioid scripts.
More than a thousand lawsuits were filed against Rite Aid, alleging that the company oversupplied opiate prescription medications.
A company spokesperson informed the Wall Street Journal that lenders will furnish financing to assist the pharmacy in navigating the bankruptcy proceedings.
In a statement, chief restructuring officer and chief executive officer Jeffrey Stein said, "We are grateful that our customers and communities continue to select our pharmacies and stores for their healthcare needs while we remain committed to serving them."
Pharmacy Disputes
In July, Matthew Schroeder, chief financial officer and executive vice president of Rite Aid, disclosed the organization's unsatisfactory quarterly earnings call. In light of this, the closures might not be as unexpected.
The organization affirmed that its net loss for the fiscal year 2024 is "anticipated to range between $650 million and $680 million."
This figure exceeded its prior forecasts.
"We continually evaluate the performance of stores, especially those with limited lease remaining, to determine if there is room for us to optimize the fleet's profitability and efficiency further," Mr. Schroeder stated.
Since late 2021, Rite Aid has closed 145 stores in total over the previous year.
Meanwhile, the biggest pharmacy chain in the United States, CVS, shut down 244 locations between 2018 and 2020. It declared its intention to shutter 900 stores by 2024 in 2021. Walgreens initially projected to shutter 200 stores in 2019, and an additional 150 were to close in June.
From 1980 to 2022, the number of independent pharmacies decreased by nearly 50 percent, according to the consulting firm McKinsey.
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