In a move to restructure its struggling business, Rite Aid has recently disclosed its plans of shutting down 50 stores located in Ohio and Michigan.
As per Supermarket News, the pharmacy chain’s Chapter 11 bankruptcy filing will result in the closure of 33 locations in Michigan and 17 in Ohio. The store had previously listed over 60 other sites in these two states that were also scheduled to shut down in the filed paperwork earlier this month.
Last month, Rite Aid made an announcement regarding its Waterford distribution center in Michigan. The company declared that it plans to shut down the center, leading to the unfortunate layoff of 191 employees. As per the Worker Adjustment and Retraining Notification (WARN) notice filed with the Michigan Department of Technology, Management, and Budget, the closure of the distribution center is imminent.
According to USA Today, Rite Aid has closed down more than 500 of its locations nationwide since October of last year. The process began with the closure of 154 stores, and since then, the company has been shutting down hundreds of other locations in smaller groups. Prior to the filing, Rite Aid had 2,111 stores across the country, but now its website states that 1,591 of its stores remain operational.
In a historic ruling, a US bankruptcy judge approved the bankruptcy restructuring plan of the renowned pharmacy chain, Rite Aid, at the beginning of the month. This move is a significant step towards the company’s financial recovery, allowing them to reduce their debt by an impressive $2 billion. As per the plan, Rite Aid will transfer management to a group of lenders, marking a crucial milestone in its restructuring process.
In a Trenton, New Jersey court proceeding, Judge Michael Kaplan granted his consent. Rite Aid was facing the threat of going out of business if the reorganization plan had not been approved. The company had faced severe financial difficulties and filed for Chapter 11 bankruptcy in October 2023, with losses amounting to $750 million, compared to the prior fiscal year’s revenue of $24 billion.
During the bankruptcy proceedings, Rite Aid focused on streamlining its operations by selling its pharmacy benefit company, Elixir, and shutting down several stores. The reorganization also involved reaching settlements with key creditors such as McKesson and other lenders, which played a vital role in restoring the company’s financial stability.
