Rite Aid announces bankruptcy filing, says it will continue to serve customers
Company installs new CEO, says it will ‘close additional underperforming stores’
KAYLEE LINDENMUTH / SHENANDOAH SENTINEL - Rite Aid in Shenandoah on Sept. 16, 2020.
PHILADELPHIA – Rite Aid, the only major pharmacy chain with locations in northern Schuylkill County, has announced that it is filing for Chapter 11 bankruptcy.
The Philadelphia-based chain has locations in Shenandoah, Ashland, Mahanoy City, and Frackville, and has been struggling more than $3 Billion in debt and a legal battle with the Department of Justice over “unlawful prescriptions.”
The company says in a media release that the filing is part of a “financial restructuring plan that will allow the company to accelerate its ongoing business transformation,” and will “significantly reduce the Company’s debt, increase its financial flexibility and enable it to execute on key initiatives.”
“Rite Aid is continuing to deliver leading healthcare products and services across its retail and online platforms for the nearly one million customers it serves daily,” the company said in a media release, adding that they remain “committed to improving health outcomes and delivering on its purpose to help people achieve whole health for life.”
At the same time, Rite Aid has also appointed a new CEO effective immediately.
Jeffrey S. Stein assumes the CEO role from Elizabeth Burr, who had been interim CEO since January and will continue as Director of the company’s board of directors.
“Rite Aid has served customers and communities across our country for more than 60 years, and the important actions we are taking today will enable us to move ahead as a stronger company,” Stein said in a media release. “With the support of our lenders, we look forward to strengthening our financial foundation, advancing our transformation initiatives and accelerating the execution of our turnaround strategy. In doing so, we will be even better able to deliver the healthcare products and services our customers and their families rely on – now and into the future.”
“We remain focused on serving our customers and communities, and we are grateful that they continue to choose our stores and pharmacies for their healthcare needs,” Stein continued. “We thank our associates for their ongoing hard work and dedication, and we extend our gratitude to our partners, suppliers and vendors for their continued support.”
Part of the restructuring plan, Rite Aid said, includes “optimizing the company’s store footprint,” which they say will “ensure it is operating efficiently while meeting the needs of its customers, communities and associates.”
“In connection with the court-supervised process, the Company will continue assessing its footprint and close additional underperforming stores,” Rite Aid said in the release. “These efforts will further reduce the Company’s rent expense and are expected to strengthen its overall financial performance.”
Mr. Stein added, “The court-supervised process provides Rite Aid with legal tools to accelerate our footprint optimization in an efficient and orderly manner. We look forward to working closely with our landlords to determine the best path forward for each of our stores.”
Rite Aid says it is making every effort to ensure customers of impacted stores have access to health services, whether at another Rite Aid or a nearby pharmacy, and will work to transfer prescriptions accordingly so that there is no disruption of services.
About Author
