Rite Aid Corp. (NYSE:RAD) filed for bankruptcy yesterday and is reportedly planning to close stores as part of its restructuring.
In a press statement, the Philadelphia-headquartered chain said it was pursuing a “financial restructuring plan that will allow the Company to accelerate its ongoing business transformation. Implementing the contemplated restructuring plan will significantly reduce the Company’s debt, increase its financial flexibility and enable it to execute on key initiatives. In connection with this, Rite Aid has initiated a voluntary court-supervised process under Chapter 11 of the U.S. Bankruptcy Code.”
The company added it “received a commitment for $3.45 billion in new financing from certain of its lenders. This financing is expected to provide sufficient liquidity to support the Company throughout this process.”
Jeffrey S. Stein, the head of the financial advisory board Stein Advisors LLC, was named CEO, chief restructuring officer and a board member at Rite Aid. In the Rite Aid press statement, Stein insisted that the company remained “focused on serving our customers and communities,” although he also noted Rite Aid will be “working closely with our landlords to determine the best path forward for each of our stores.”
Rite Aid, which was founded in 1962, operates 2,100 stores in 17 states. While the company said it would “close additional underperforming stores,” it did not provide a timeline or a map of which stores it planned to shutter. The company operates 10 stores in Fairfield County and 18 in the Westchester/Hudson Valley region.
Rite Aid also noted that it was negotiating a proposed transaction under which the pharmacy benefit management company MedImpact would acquire Elixir Solutions, a subsidiary focused on pharmacy benefits and services company. Elixir Solutions is not part of the bankruptcy filing.
During the first quarter, Rite Aid reported a net loss of $306.7 million, compared to a $110 million net loss one year earlier, and revenue of $5.65 billion, compared with $6.01 billion one year earlier. The company, which had been battered with lawsuits related to the opioid crisis and aggressive competition from larger chain, forecasted a net loss between approximately $650 million and $680 million for fiscal year 2024.
Photo by Mike Mozart / Flickr Creative Commons
