Oct. 16 (UPI) — Pharmacy retailer Rite Aid has taken the step of filing for Chapter 11 bankruptcy protection, facing challenges such as mounting debt, declining sales, and fierce competition from competitors like Walgreens and CVS.
The company’s filing in the U.S. district bankruptcy court in New Jersey on Sunday revealed that it has reached an agreement with its creditors on a restructuring plan, allowing for the closure of underperforming retail locations and reducing its debt, including obligations arising from lawsuits related to the opioid crisis.
“The implementation of the proposed restructuring plan will significantly reduce Rite Aid’s debt, enhance its financial flexibility, and enable the company to pursue key initiatives,” stated Rite Aid.
“Rite Aid remains dedicated to providing top-quality healthcare products and services through its retail and online platforms, serving almost one million customers daily. The company is committed to improving health outcomes and fulfilling its mission of helping people achieve lifelong well-being.”
According to Rite Aid’s latest quarterly report, its revenues decreased from $6.01 billion in 2022 to $5.6 billion this year. Its stock price also dropped from $5.56 per share a year ago to $2.03 per share.
In addition to closing underperforming stores and reaching an agreement with creditors, Rite Aid plans to secure additional liquidity and address other legal claims. The company has appointed Jeffrey S. Stein as its CEO to navigate through the bankruptcy process.
Stein replaces interim CEO Elizabeth “Busy” Burr, who will continue to serve as a board member for Rite Aid.
“Rite Aid has been serving customers and communities across the country for over 60 years, and today’s critical actions will position us as a stronger company going forward,” Stein remarked in a statement.
“With the support of our lenders, we are excited to strengthen our financial foundation, advance our transformation initiatives, and accelerate the execution of our turnaround strategy.”
Rite Aid intends to make decisions on store closures based on the needs of its customers, local communities, and employees.
“The company will continuously evaluate its store footprint and close additional underperforming locations,” Rite Aid explained. “These efforts will further reduce rental expenses and bolster overall financial performance.”
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
