Rite Aid Is Selling 1,000 Stores to Competitors, Including CVS and Walgreens
While it navigates bankruptcy, Rite Aid has found buyers for many of its U.S. stores.
Defunct pharmacy chain Rite Aid is offloading assets, including over 1,000 stores. Seeing an opportunity, several other retailers, including longtime rivals, are lining up to buy them.
So far, CVS Pharmacy is taking the lion’s share. The top drugstore chain in the country wants 625 Rite Aid pharmacies across 15 states as well as 64 stores in the Pacific Northwest. Other interested parties include Walgreens, Albertsons, Giant Eagle, and Kroger.
“These agreements ensure our pharmacy customers will experience a smooth transition while preserving jobs for some of our valued team members,” Rite Aid CEO Matt Schroeder said, per the New York Post.
Rite Aid filed for bankruptcy earlier this month. It was the second Chapter 11 protection filing for the struggling drugstore in less than two years. The bankruptcy court has approved the sale of its pharmacy business, which the company hopes to complete by June.
Rite Aid’s Bankruptcies
Rite Aid was forced to file for bankruptcy for the first time in October 2023. The company had been hit with various legal battles related to charges of illegally filling opioid prescriptions, which only exacerbated its already mounting debt.
At the same time, Rite Aid was suffering from the same downturn in business that plagued the drugstore industry in general. Consumers began spending less in stores, and medication profit margins dropped as reimbursement rates from pharmacy benefit managers were being cut. Even the company’s main rival CVS had to lay off nearly 3,000 workers to cut costs.
Seven months after emerging from bankruptcy and becoming a private company, Rite Aid filed again. In order to keep its stores operating and look for a buyer, Chapter 11 protection was the best option.
“While we have continued to face financial challenges, intensified by the rapidly evolving retail and healthcare landscapes in which we operate, we are encouraged by meaningful interest from a number of potential national and regional strategic acquirors,” said Schroeder, per CNN.
At last count, Rite Aid has about 1,240 locations in the U.S., roughly half of what it had in 2023. Through the current bankruptcy process, another 10% are likely to be shuttered, and numerous employees will be out of a job.
