Rite Aid has filed for Chapter 11 bankruptcy protection, this time with the goal of selling all of its assets including all store locations and distribution centers. This would mean the closing of all New Jersey locations.
Rite Aid announced on May 5th that it is pursuing a sale process for substantially all of its assets.
A&G Real Estate Partners has been hired to sell their 1194 retail leases and 50 fee-owned properties… Including their distribution centers such as in Delran NJ. The Philadelphia Navy Yard headquarters is also available.
During the process Rite Aid customers can continue to access pharmacy services and products in the stores and online, including prescriptions and immunizations.
But they are also working on facilitating a smooth transfer of customer subscriptions to other pharmacies.
Additional information from ABC News says that while the stores will remain open for now, the company is not buying any new inventory, so the already mostly bare shelves will quickly become even more empty.
The full process could take a few months, with all locations either closing or being sold to a new owner.
If you have Rite Aid Gift Cards you should use them immediately as it’s been reported they will soon stop being accepted.
Employees assisting in this process will continue to receive pay and benefits. Rite Aid has secured access to $1.94 billion in new financing to facilitate the sale process. That being said it is expected that through the next few weeks more and more employees will lose their jobs heading to the final closure.
Ten years ago Walgreens offered to buy the entire Rite Aid chain, but was met with scrutiny from US regulators. Instead, in 2017 they purchased about 2,000 Rite Aid locations.
But now Walgreens themselves isn’t in as strong a position as they once were, and in fact have been purchased by a Private Equity firm after Walgreens also experienced pressure in it’s retail and pharmacy businesses.
With few options to sell the remaining company as a whole, it very likely means the end of Rite Aid and their retail/pharmacy locations.
One expected outcome for the Rite Aid locations is that other pharmacy brands and retailers “cherry pick” individual store locations which suit their expansion needs.
This is the second recent bankruptcy effort for the Philadelphia based Rite Aid company. That first effort was focused on keeping the company viable by shedding bad debt and underperforming store locations. Those financial challenges were started by lawsuits regarding the pharmacy chain’s dispensing of “unnecessary opioid prescriptions” coupled with challenges in the pharmacy and retail business.
Rite Aid successfully exited that bankruptcy about seven months ago as a privately held firm, but it seems the process left them a bit fractured… stuck in a “Catch-22” which left them without the finances needed to properly restock their retail stores, which then of course with more limited products to sell further reduced sales and finances!
Last wee I reported that the Sicklerville Road location had closed, which at the time was an individual store closing decision connected to their lease ending in July of this year.