Rite Aid, the well-known drugstore chain, has found itself in a challenging position. As part of its efforts to navigate through Chapter 11 bankruptcy, Rite Aid has closed several of its stores in the Western New York (WNY) area. These efforts aim to reduce the company's debt and find a sustainable path forward in a highly competitive retail pharmacy market.
Strategic Store Closures to Manage Costs
In a strategic move to manage costs and improve its financial standing, Rite Aid has made the difficult decision to close underperforming stores. This decision was communicated to a court as part of the bankruptcy process.
A company spokesperson emphasized to Business First the importance of these closures in reducing rent expenses and strengthening the company's overall financial health. Although specific numbers of future store closures remain unconfirmed as the company continues its economic restructuring, court documents have revealed plans to close an additional 77 stores this year.
This is in addition to the 150 stores Rite Aid closed last fall and is part of a broader effort announced after the company filed for Chapter 11 bankruptcy in October. As reported by Masslive.com, 431 stores are slated for closure.
One significant closure in the Buffalo area is the store located at 47 Niagara St. in Tonawanda, which is scheduled to cease operations next month. Pharmacy services will end on May 14, and the store will be completely closed on May 19.
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A Decade of Downsizing and Community Impact
Over the last decade, Rite Aid has been steadily reducing its store count. From about 4,600 stores in 2013, the company downsized to approximately 1,700 stores. This reduction came after a failed attempt to sell to Walgreens, resulting in the sale of about 2,000 stores to the competitor in 2017.
Today, Rite Aid operates a much smaller network than its competitors, CVS and Walgreens, which have expansive store networks.
The closure trend continued with the shutting down of the Main Street store in Downtown Buffalo in September 2023, following the closure of three other WNY locations in May.
In January, the chain shuttered its North Main Street location in Jamestown. These closures, particularly those announced in May, have profoundly impacted the communities they served.
7 News Reporter Michael Schwartz spoke with Deborah Sutton, a resident near the closed West Ferry Street store, capturing the sentiment of many locals. "So this is not just another store closing?" asked Michael.
"No, it's not. It's our community going down," Deborah responded, highlighting the broader implications of Rite Aid's restructuring on neighborhood cohesion and access to pharmacy services.
In addition, Rite Aid is dealing with several hurdles beyond closing stores. It's struggling with legal competition issues and has secured $3.45 billion in new funding to help its business.
The chain is entangled in over 1,000 lawsuits related to the opioid crisis, leading to a $30 million settlement in 2022. Additionally, Rite Aid's recent SEC notice about delaying its financial report suggests it's considering major changes, possibly including bankruptcy.
This reflects Rite Aid's tough situation as it tries to recover and grow amidst ongoing challenges.
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