Rite Aid Files for Bankruptcy Again Amid Ongoing Financial Turmoil

Business May 6, 2025 Add to Reading List

Just seven months after emerging from Chapter 11 bankruptcy, Rite Aid has once again filed for protection under the same status, the company announced Monday. Despite financial restructuring last year, the drugstore chain continues to face mounting challenges.

Rite Aid stated that the renewed bankruptcy filing is intended to streamline its search for a buyer while maintaining store operations. The company emphasized that its locations will remain open throughout the proceedings.

CEO Matt Schroeder acknowledged the difficult retail and healthcare climate, saying there’s growing interest from regional and national buyers. He assured customers and employees that the company's main goals remain uninterrupted pharmacy access and job preservation.

The first bankruptcy, initiated in October 2023, was triggered by heavy debt, weak performance against stronger competitors, and legal liabilities over alleged opioid prescription violations, which collectively drove the company’s debt near $4 billion.

After nearly a year under Chapter 11, Rite Aid had trimmed $2 billion in debt, secured $2.5 billion to sustain operations, and shuttered around 500 stores before reemerging in September 2024.

In its latest move, the company has secured close to $2 billion in new financing to continue operations during its second bankruptcy process. Rite Aid now operates about 1,250 stores, which is roughly half of what it had two years ago.

Rite Aid’s downward spiral has been long in the making. A $17 billion acquisition bid from Walgreens in 2015 was blocked over antitrust concerns. A scaled-down deal followed in 2017, allowing Walgreens to acquire nearly 2,000 stores, weakening Rite Aid's competitive edge.

Industry experts believe the second bankruptcy is unsurprising. Neil Saunders from GlobalData remarked that Rite Aid failed to fix underlying problems. He predicts that other retailers may acquire select locations, while rivals Walgreens and CVS also navigate closures and restructuring.