Rite Aid Corp., the beleaguered U.S. pharmacy chain, has informed employees of its intention to file for Chapter 11 bankruptcy for the second time in less than three years.
The announcement comes just months after the company emerged from its previous bankruptcy in September 2024, following a restructuring effort that ultimately failed to stabilize its finances or secure new capital from lenders.
According to a letter from CEO Matthew Schroeder, Rite Aid was unable to obtain additional funding necessary to continue operations. As a result, the company is preparing to seek bankruptcy protection again and will implement job cuts at its corporate offices in Pennsylvania.
This move underscores the ongoing challenges facing the chain, which has struggled to compete with larger rivals and manage mounting legal and financial pressures.
Rite Aid’s first bankruptcy filing in October 2023 led to the closure of more than 800 stores, reducing its footprint to just over 1,200 locations nationwide. Despite eliminating approximately $2 billion in debt and securing $2.5 billion in exit financing, the company continued to face liquidity concerns and operational headwinds.
Recent reports indicate Rite Aid is now considering the sale of individual stores and further closures as it seeks to maximize value for creditors and maintain some level of ongoing operations.
The company’s senior creditors are expected to face significant losses from this second bankruptcy, a sharp reversal from earlier projections that suggested full repayment was possible through liquidation. Rite Aid’s struggles have been compounded by competitive pressures from industry giants and a series of legal challenges, including opioid-related lawsuits.
As Rite Aid moves toward its second Chapter 11 filing, the future of its remaining stores and thousands of employees remains uncertain.
The company’s latest restructuring efforts will be closely watched by creditors, employees, and industry observers as it attempts to navigate yet another period of financial turmoil.