Rite Aid, With 458 Stores In CA, Prepares For Bankruptcy: Reports

CALIFORNIA — Amid looming opioid lawsuits and a $3.3 billion debt load, Rite Aid appears to be quietly closing stores in California as reports say the pharmacy chain could be headed for bankruptcy.

The company is planning to file for Chapter 11 bankruptcy to address more than 1,000 state and federal lawsuits it faces for allegedly contributing to the opioid epidemic, according to the Wall Street Journal and Bloomberg. Rite Aid reported a net loss of $307 million in the first quarter of 2023, compared to last year’s first quarter net loss of $110.2 million.

The company's stock fell by more than 50 percent the day after a Wall Street Journal reported the pharmacy was prepping for Chapter 11 bankruptcy in August. Yahoo Finance reported that the store was planning to close more than 400 stores although the company has not confirmed the report.

The pharmaceutical retailer has 458 stores in California. However, that number is rapidly dwindling. Over the last month, the chain announced closures from Castro Valley to Valencia and recently shuttered at least one store in Orange County.

Rite Aid has not publicly addressed the bankruptcy filing reports, and sources with knowledge of the matter told Bloomberg the company is still finalizing its plans.

The company has also not filed a Worker Adjustment and Retraining Notification (WARN) notice with the state, which is required in the case of a mass closure and/or mass layoff, as of Sepr. 13.

Among two Rite Aid closings, Patch has been able to confirm, the company assured customers their prescriptions would be transferred to neighboring pharmacy's including Wallgreens.

According to the company, prior to the shutdown, they will review each neighborhood to ensure that consumers have access to health services, whether at Rite Aid or a neighboring pharmacy, and will make every effort to smoothly transfer their prescriptions so that services are not disturbed.

Rite Aid management also stated that they make every effort to move associates to other Rite Aid sites.

The Justice Department filed a civil lawsuit against Rite Aid in May, claiming that the company violated the Controlled Substances Act by repeatedly filling prescriptions “with obvious red flags” and intentionally deleting notes about suspicious prescribers.

Rite Aid has more than 2,200 pharmacies in 17 states