On Sunday, Rite Aid, once the largest U.S. pharmacy chain, filed for bankruptcy court protection from its creditors and vowed to remake the company as a “modern neighborhood pharmacy.”
Now, in its first move, it has said it is closing 154 stores in more than 10 states.
The branches to be closed were detailed in a filing Tuesday in bankruptcy court in New Jersey. The store closings are intended to help Rite Aid save money on rent and improve its financial position.
Rite Aid stores in Pennsylvania, California and New York will bear the brunt of the closures. About 40 locations in Pennsylvania will remain closed. More closings are expected as the company works to get rid of billions of dollars of debt. It has approximately 45,000 employees, including 6,100 pharmacists.
Some of Rite Aid’s largest creditors include pharmaceutical company McKesson and insurer Humana Health.
Rite Aid’s bankruptcy comes after several years of steadily declining sales. It also faces more than 1,000 lawsuits accusing it of filling illegal prescriptions for painkillers. The chain has more than 2,000 stores in 17 states, far behind its rivals CVS Pharmacy, which has about 10,000 stores nationwide, and Walgreens, which has about 9,000. Rite Aid’s scale diminished significantly after its failed merger with Walgreens in 2017.
As of June, Rite Aid had $3.3 billion in debt, not including pending opioid litigation, according to company filings. Its stock has fallen nearly 80 percent since the beginning of the year.
The company has secured up to $3.45 billion in financing from its lenders for operations during bankruptcy reorganization. company statement, Rite Aid will sell its pharmacy benefits company Elixir to MedImpact Healthcare Systems.
Jeffrey Stein, who was named chief executive of Rite Aid on Sunday, said the chain will use the bankruptcy process to emerge as “a stronger company.”
Lauren Hirsch And Jordan Holman Contributed to the reporting.