Rite Aid Closing Underperforming Stores: Could Glen Burnie, HdG, Owings Mills Shut Down?
Patch reporter Mark Hand wrote this story.
MARYLAND — The Rite Aid pharmacy chain, which has 38 stores in Maryland, said Sunday it will accelerate the closure of some underperforming stores under terms outlined in its Chapter 11 bankruptcy filing.
The company did not disclose the locations of Rite Aid drug stores considered for closure, or say when the stores would close.
Prescriptions of customers of the affected stores will be transferred to a nearby Rite Aid or other drug store “so that there is no disruption of service,” the company said in a statement. People who work at the stores will also be transferred to other Rite Aid locations where possible, the company said.
Rite Aid’s bankruptcy comes amid slumping sales and heavy debt from an opioid lawsuit filed by the Justice Department in March that accuses the company of filling prescriptions for large quantities of opioids “that had obvious, and often multiple, red flags indicating misuse.”
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Other drug store chains, including rivals CVS and Walgreens, have settled similar lawsuits, but were better positioned financially. But even they are struggling and closing in a tough environment for national drug store chains as Amazon and big-box retailers like Walmart, Target, Costco and others make it more convenient to have prescriptions filled, CNN reported.
Rite Aid said it had secured $3.45 billion in financing and debt reduction agreements that will help it stay afloat through the court-supervised bankruptcy. The company will sell off its Elixir Solutions, its prescription benefit provider.
Additionally, the agreement settles outstanding lawsuits against the company for allegedly filing unlawful opioid prescriptions, one of the exacerbating factors contributing to Rite Aid’s bankruptcy.
In a notice to the Securities and Exchange Commission Thursday, Rite Aid said it was “unable, without unreasonable effort or expense,” to file its latest quarterly report as it reviewed “strategic alternatives.”
Losses that quarter are expected to be significantly higher than in the previous quarter, the company said. That’s on top of losses of about three quarters of a billion dollars for the year ended March 2023, and losses of $307 million from March to May, CNN reported.
Rite Aid appointed a new CEO, Jeff Stein, who will lead restructuring efforts and also serve on the company’s board of directors.
“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,” Stein said in the statement. “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.”
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