Rite Aid, a top 10 pharmacy chain in the United States, filed for bankruptcy protection on October 15, 2023. The company has been struggling under a heavy debt load and is facing lawsuits alleging that it oversupplied prescription painkillers.
This move comes amidst a nationwide crisis related to opioids, which are legally sold medications that can lead to chemical dependency and have been linked to an increase in overdose deaths.
Rite Aid is currently embroiled in over a thousand lawsuits at various levels, including federal. These lawsuits allege that Rite Aid pharmacists filled illegal prescriptions for painkillers. While the company has denied these accusations, the legal battles have contributed to a debt in the billions of dollars.
The company’s struggles are not limited to legal issues. It has also faced stiff competition from larger chains, leading to a decline in sales over recent years. Despite these challenges, Rite Aid has secured $3.45 billion in financing from creditors to support its operations during the bankruptcy process.
Rite Aid’s shares, which are listed on the New York Stock Exchange (NYSE), have seen a significant decline this year, with a drop of more than 80%. The last trading session closed at US$0.65. The company also has maturing debt securities on the market.
The company employs 45,000 people and has been closing several stores in recent months. This trend is expected to continue.
The bankruptcy filing has had a ripple effect on the market. Shares of CVS Health, a rival company, recently rose by 2.06% on the NYSE. The potential reduction in pharmaceutical retail is boosting shares. Additionally, last week’s better-than-expected results from UnitedHealth are contributing to this upward trend. Amazon, another company exploring the pharmaceutical segment, also saw a rise of 1.45%. However, Walgreens, another competitor, saw a decline of 1.08%.
About Rite Aid
Rite Aid Corporation is a prominent drugstore chain in the United States. It was established in 1962 and is headquartered in Philadelphia, Pennsylvania. The company was initially named Thrift D Discount Center and was founded by Alex Grass in Scranton, Pennsylvania.
Rite Aid is one of the largest corporations in the United States in terms of total revenue. It ranks among the top 150 on the Fortune 500 list. The company operates numerous stores across the country and offers a wide range of products and services. These include pharmacy services, health and wellness products, vitamins and supplements, personal care items, beauty products, household supplies, pet supplies, groceries, and items for babies, kids, and toys.
There are more than 2,150 Rite Aid stores in the United States. The state with the most number of Rite Aid locations is California, with 474 stores, which is about 22% of all Rite Aid stores in the US.
