On Sunday, Rite Aid, once the largest U.S. pharmacy chain, filed for bankruptcy protection from its creditors and promised to transform the company into a “modern neighborhood pharmacy.”

As one of the first steps, the company is now closing 154 stores in more than ten states.

Which stores would be closed were detailed in a filing with New Jersey bankruptcy court on Tuesday. The store closures are intended to help Rite Aid save on rent and improve its financial situation.

Rite Aid stores in Pennsylvania, California and New York will bear the brunt of the closures. About 40 locations in Pennsylvania will close. More closures are expected as the company works to shed billions of dollars in debt. It employs around 45,000 people, including 6,100 pharmacists.

Rite Aid’s largest creditors include pharmaceutical company McKesson and insurer Humana Health.

Rite Aid’s bankruptcy comes after years of steady sales declines. The company also faces more than 1,000 lawsuits accusing it of writing illegal prescriptions for painkillers. The chain has more than 2,000 stores in 17 states, well behind its competitors CVS Pharmacy, which has nearly 10,000 stores nationwide, and Walgreens, which has nearly 9,000 stores. Rite Aid was significantly downsized following a failed merger with Walgreens in 2017.

According to corporate filings, Rite Aid had $3.3 billion in debt as of June, not including pending opioid litigation. The stock has fallen by almost 80 percent since the beginning of the year.

The company has secured up to $3.45 billion in financing from its lenders to operate during bankruptcy restructuring, according to a company statement. Rite Aid will sell its pharmaceutical company Elixir to MedImpact Healthcare Systems.

Jeffrey Stein, who was named CEO of Rite Aid on Sunday, said the chain would use the bankruptcy process to become “a stronger company.”

Lauren Hirsch and Jordyn Holman contributed reporting.

Source : www.nytimes.com

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