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Rite Aid to Close or Sell All Locations in Massachusetts Amid Bankruptcy

The interior of a Rite Aid store affected by the recent bankruptcy filing.

News Summary

Rite Aid has announced plans to close or sell its remaining locations in Massachusetts after filing for Chapter 11 bankruptcy for the second time in two years. The pharmacy chain’s liabilities range from $1 billion to $10 billion, and it is currently seeking buyers for its assets while ceasing distribution center operations. Most stores in Massachusetts will remain open for a few months, but inventory will not be replenished. This shift reflects ongoing financial difficulties and a significant reduction in store presence, with only four locations left operational in the state.

Boston, Massachusetts – Rite Aid, a renowned pharmacy chain, is set to close or sell all remaining locations in Massachusetts after filing for Chapter 11 bankruptcy for the second time in two years, signaling significant financial distress. The company’s liabilities are estimated between $1 billion and $10 billion as detailed in its bankruptcy petition submitted in New Jersey.

As part of its bankruptcy proceedings, Rite Aid is actively seeking a buyer and believes that the re-filing will expedite the sale process. In the meantime, the majority of Rite Aid stores in Massachusetts will remain operational for a few months, although all locations are expected to be closed or transferred to new ownership in due course. Currently, Rite Aid operates only four stores in Massachusetts, located in Clinton, Fall River, Greenfield, and New Bedford.

CEO Matt Schroeder has acknowledged the financial difficulties faced by the company but remains optimistic, citing interest from potential buyers. The plan includes selling customer prescription files, current inventory, and other assets while ceasing operations at distribution centers. Importantly, as Rite Aid stores remain open, the chain will not replenish inventory, suggesting a likelihood of bare shelves in the near future.

Effective next month, Rite Aid will halt the issuance of customer rewards points, will no longer honor gift cards, and will stop returns or exchanges. This decision marks a significant shift in the company’s operations as it navigates through its financial struggles. Its current challenges reflect a competitive environment, with tighter profit margins, increased theft, opioid-related court settlements, and tough competition from both online and discount retailers.

Rite Aid currently operates about 1,240 pharmacies, a significant reduction from approximately 2,000 in 2023. Since filing for its first bankruptcy in late 2023, Rite Aid has closed over 800 stores across the country, many of which were situated in New England. Following these closures, only 70 Rite Aid locations remain operational throughout the Northeastern United States, illustrating the substantial impact of its financial situation.

The closures in Massachusetts include previously operational locations in Webster and Revere, contributing to a notable decrease in the company’s presence in the region. The pharmacy chain is undergoing a strategic sale process, aimed at ensuring a seamless transition for pharmacy services and preserving customer prescriptions.

To navigate through the ongoing bankruptcy processes, Rite Aid has secured $1.94 billion in new financing to support its operations. Despite the loss of numerous locations and the challenges faced, the company continues to pursue strategies to stabilize and eventually sell its assets, thus marking a crucial period for the pharmacy chain as it transitions into this new phase.

As the situation evolves, the fate of Rite Aid’s remaining Massachusetts locations will unfold in the coming months, leaving many customers and employees in anticipation of what lies ahead for the iconic pharmacy chain.