(Bloomberg) – Less than a year after Rite Aid Corp. completed the restructuring of the troubled pharmacy chain, Rite Aid Corp. filed for bankruptcy again.
CEO Matthew Schroeder said in a letter to employees that the company could not get additional funds from lenders to continue operating the business. The pharmacy chain also plans to lay off employees at its corporate office in Pennsylvania, the letter said.
A ceremonial aid member seeking court protection in New Jersey on Monday, listing $1 billion to $10 billion in assets and liabilities in his Chapter 11 petition. Lenders supporting the company's emergence may make up more if the ceremony aid has been liquidated rather than reorganized, according to the Bloomberg News. At that time, the restructuring saved thousands of jobs.
Rite Aid customers are still able to access prescriptions and vaccines in stores and online, according to a company statement. The company did not return news seeking comments. A copy of the letter sent to employees was shared earlier on social media.
According to people familiar with the situation, Schroeder told employees in a brief speech on Monday that all etiquette aid stores will be closed or sold. The company is working with several regional and national buyers who may be interested in parts of the company, but Schroeder has not specified whom.
Schroeder blamed the work for cutting “a sharp downturn in the economy” and raising costs for suppliers and landlords. In his letter, he said Rite Aid lenders will no longer pay payroll or other employment-related expenses “if we keep the entire labor force.”
Retail pharmacies have faced many challenges in recent years, with their profits creating competition for reimbursement for prescriptions and increasing sales of household goods for online retailers and discount chains. Some pharmacies place their products behind locked obstacles to stop theft, which also creates a frustrating shopping experience. Walgreens Boots Alliance Inc., one of the largest pharmacy chains in the United States, recently agreed to be purchased by private equity firm Sycamore Partners for $10 billion.
Schroeder also said that the “important” etiquette aid provider recently notified the pharmacy chain that it will shorten and limit payment terms, which could accelerate corporate loans.
The retailer first filed Chapter 11 in October 2023, cutting $2 billion in debt with court time and closing about 850 locations as part of a plan to hand over control of the business to lenders.
When Rite Aid emerged in bankruptcy in September, it had become a stronger company by then, with “debt and additional financial resources drastically reducing.”
But that's not enough. The pharmacy still bears more than $2 billion in debt and struggles with weak demand and inflationary pressures.
(Update information about bankruptcy filings, starting from the first paragraph, always for other contexts.)
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