Rite Aid is a name in the pharmacy industry which many of you have heard. It is the third-largest US drugstore chain, which is now embroiled in the headlines of bankruptcy. Although we all have read the headlines, but what’s the real story? Is Rite Aid going out of business in 2023?
There’s no denying that it is a tough time for all the brick-and-mortar stores as online sales are surging. However, these online sales are making it challenging for the actual stores you can walk into, and Rite Aid is no exception.
According to Nick Fabrizio, a senior lecturer in health policy at Cornell University and a consultant for hospitals and medical groups, “The loss of pharmacies is a serious problem, especially for the people in poor rural and urban areas.”
Let’s get started to learn about the history of Rite Aid and check through the facts to understand better whether Rite Aid is really closing or not.
About Rite Aid And How It Started
Rite Aid is an American drugstore chain which is based in Philadelphia, Pennsylvania. It was founded in 1962 by Alex Grass under the name Thrift D Discount Center.
The store then expanded into five additional states in 1965 and went public as Rite Aid in 1968.
The company also ranked no. 148 on the Fortune 500 list. Not only this, but in just a few years, Rite Aid became the third-largest retail drugstore chain in the country.
Moreover, throughout the years of its operations, Rite Aid has acquired many pharmacies and had partnerships with corporations such as General Nutrition Corporations and Walgreens.
Is Rite Aid Going Out Of Business?
Unfortunately, the answer to this is not straightforward but rather a complicated one. Rite Aid has already filed for Chapter 11 bankruptcy protection.
The chain has been closing a large number of stores- 239 since 2021, and amidst the bankruptcy, it is now planning to shed more of its stores, around 100 more.
Over the past 6 years, Rite Aid has computed around $3 billion in losses. Although to keep the company afloat during the bankruptcy, it has secured around $3.5 billion in financing and debt agreements from its lenders.
Rite Aid stated that it will continue closing its stores and selling some of its business. However, the company is the third-largest pharmacy chain, and bankruptcy could also offer the company an opportunity to restructure and start fresh.
Why Is Rite Aid Closing Stores?
Despite the fact that Rite Aid is the third-largest drugstore chain and has a long history, it is struggling to survive in the industry.
The reason behind the closures and bankruptcy can be traced to many factors.
Firstly, in March, the Justice Department of the US filed a complaint against Rite Aid, accusing the company it knowingly filled thousands of illegal prescriptions for controlled substances.
It also accused the pharmacists and the company of ignoring the ‘red flags’ that indicated that the prescriptions were unlawful. According to the U.S. Bankruptcy Court of New Jersey, Rite Aid has $4 billion in debt.
The company also faces 1,600 other opioid lawsuits from the local and state governments, individuals, and hospitals.
Secondly, the entire drugstore retail sector is struggling to compete with giants such as Amazon, Walmart, Target, and Costco, which are penetrating deeper into the pharmacy industry by offering more customer-friendly alternatives.
All this led to Rite Aid filing for bankruptcy and the store’s large number of closures.
Did Rite Aid Get Bought Out?
Rite Aid did not get bought out. Although it had plans to merge with grocery store Alberston in 2018, the deal fell off.
In the same month, it sold its 1,932 stores and 3 distribution centers to Walgreens for $4.3 billion.
So, Rite Aid remains an independent company but is much smaller than it was before the sale.
Rite Aid Stores That Are Set To Close
Rite Aid is all set to close over 150 of its stores after filing the bankruptcy. The states with the hardest hit by the closures are California, New York, and the company’s home state, Pennsylvania.
Here is the list of stores that are set to be closed by Rite Aid:
- 4044 Eagle Rock Boulevard in Los Angeles
- 4046 South Centiela Avenue in Los Angeles
- 7859 Firestone Boulevard in Downey
- 4402 Atlantic Avenue in Long Beach
- 935 North Hollywood Way in Burbank
- 139 North Grand Avenue in Covina
- 13905 Amar Road in La Puente
- 920 East Valley Boulevard Inn Alhambra
- 3813 Plaza Drive in Oceanside
- 1670 Main Street in Ramona
- 6505 Mission Gorge Road in San Diego
- 8985 Mira Mesa Boulevard in San Diego
- 25906 Newport Road in Menifee
- 24829 Del Prado in Dana Point
- 30222 Crown Valley Parkway in Laguna Niguel
- 19701 Yorba Linda Boulevard in Yorba Linda
- 1406 West Edinger Avenue in Santa Ana
- 2738 East Thompson Boulevard in Ventura
- 720 North Ventura Road in Oxnard
- 20572 Homestead Road in Cupertino
- 2620 El Camino Real in Santa Clara
- 901 Soquel Avenue in Santa Cruz
- 571 Bellevue Road in Atwater
- 5409 Sunrise Boulevard in Citrus Heights
- 1309 Fulton Avenue in Sacramento
- 3029 Harbor Boulevard in Costa Mesa
- 959 Crenshaw Boulevard in Los Angeles
- 3000 South Archibald Avenue in Ontario
- 15800 Imperial Highway in La Mirada
- 8509 Irvine Center Drive in Irvine
- 499 Alvarado Street in Monterey
- 289 Greenwood Avenue in Bethel
- 25 Chestnut Hill Plaza in Newark
- 3209 Kirkwood Highway in Wilmington
- 1600 North Main Street in Meridian
- 5005 West Overland Road in Boise
- 5 Bel Air South Parkway, Suite 1347, in Bel Air
- 728 East Pulaski Highway in Elkton
- 5624 Baltimore National Pike in Baltimore
- 5804 Ritchie Highway in Baltimore
- 7501 Ritchie Highway in Glen Burnie
- 7967 Baltimore Annapolis Boulevard in Glen Burnie
- 80 East Main Street in Webster
- 924 West Main Street in Fremont
- 507 North Lafayette Street in Greenville
- 715 South Clinton Street in Grand Ledge
- 15250 24 Mile Road in Macomb
- 102 North Centerville Road in Sturgis
- 47300 Pontiac Trail in Wixom
- 35250 South Gratiot Avenue in Clinton Township
- 51037 Van Dyke Avenue in Shelby Township
- 3100 East Michigan Avenue in Jackson
- 9155 Telegraph Road in Taylor
- 1243 U.S. 31 South in Manistee
- 29447 Ford Road in Garden City
- 2838 East Court Street in Flint
- 1900 East 8 Mile Road in Detroit
- 36485 Garfield Road in Clinton Township
- 25922 Middlebelt Road in Farmington Hills
- 109 North Whittemore Street in St. Johns
- 1124 North Ballenger Highway in Flint
- 2701 South Cedar Street in Lansing
- 4057 Asbury Avenue, Suite 8 in Tinton Falls
- 431 Haledon Avenue in Haledon
- 35 Mill Road in Irvington
- 1636 Route 38 Suite 49 in Lumberton
- 773 Hamilton Street in Somerset
- 1434 South Black Horse Pike in Williamstown
- 3 Marshall Hill Road West in Milford
- 210 Bridgeton Pike in Mantua
- 108 Swedesboro Road, Suite 20 in Mullica Hill
- 2370 Route 33 in Robbinsville
- 1726 Route 37 in East Toms River
- 86 B Lacey Road in Whiting
- 3129 Lincoln Way East in Massillon
- 120 South Main Street in New Carlisle
- 146 Woodman Drive in Dayton
- 2701 Market Street in Youngstown
- 401 West North Street in Springfield
- 230 South Main Street in Bellefontaine
- 2440 Southeast Cesar Chavez Boulevard in Portland
- 2887 Harlem Road in Cheektowaga
- 2002 Avenue U in Brooklyn
- 2 Whitney Avenue in Floral Park
- 71-18 Kissena Boulevard in Flushing
- 3131 Hempstead Turnpike in Levittown
- 2981 Ocean Avenue in Brooklyn
- 3199 Long Beach Road in Oceanside
- 198 West Merrick Road in Valley Stream
- 836 Sunrise Highway in Bay Shore
- 2784 Sunrise Highway in Bellmore
- 901 Merrick Road in Copiague
- 577 Larkfield Road in East Northport
- 695 East Jericho Turnpike in Huntington Station
- 700-43 Patchogue-Yaphank Road in Medford
- 273 Pine Hollow Road in Oyster Bay
- 397 Sunrise Highway in West Patchogue
- 593 Old Town Road in Port Jeff Station
- 65 Route 111 in Smithtown
- 2453 Elmwood Avenue in Kenmore
- 1567 Penfield Road in Rochester
- 2715 Parade Street in Erie
- 5612 North Fifth Street in Philadelphia
- 350 Main Street in Pennsburg
- 4011 Cottman Avenue in Philadelphia
- 1441 Old York Road in Abington
- 300 Market Street in Johnstown
- 8716 New Falls Road in Levittown
- 1750 Bustleton Avenue in Philadephia
- 169 West Lancaster Avenue in Ardmore
- 1315 East Washington Lane in Philadelphia
- 801 Wyoming Avenue Suite 9 in West Pittston
- 657 Heacock Road in Yardley
- 2801 West Dauphin Street in Philadelphia
- 1709 Liberty Street in Erie
- 674 Route 196, Suite 14 in Tobyhanna
- 2722 West 9th Street in Chester
- 950 East Baltimore Pike in Yeadon
- 8235 Stenton Avenue in Philadelphia
- 7941 Oxford Avenue in Philadelphia
- 5440 Lansdowne Avenue in Philadelphia
- 700 Stevenson Boulevard in New Kensington
- 208 East Central Avenue in Titusville
- 1080 South West End Boulevard in Quakertown
- 136 North 63rd Street in Philadelphia
- 351 Brighton Avenue in Rochester
- 5235 Library Road in Bethel Park
- 5990 University Boulevard Suite 30 in Moon Township
- 2501 Saw Mill Run Boulevard in Pittsburgh
- 5410 Keeport Drive in Pittsburgh
- 6090 Route 30 in Greensburg
- 4830 William Penn Highway in Export
- 1730 Wilmington Road in New Castle
- 2178 West Union Boulevard in Bethlehem
- 1628 South Fourth Street in Allentown
- 2401 East Venango Street in Philadelphia
- 6327-43 Torresdale Avenue in Philadelphia
- 200 West Ridge Avenue Suite 112 in Conshohocken
- 301 Eisenhower Drive in Hanover
- 7036 Wertzville Road in Mechanicsburg
- 420 Daniel Webster Highway in Merrimack
- 833 North Battlefield Blvd in Chesapeake
- 1458 Mount Pleasant Road in Chesapeake
- 601 South Grady Way Suite P in Renton
- 3202 132nd Street Southeast in Mill Creek
- 110 Southwest 148th Street in Burien
- 10103 Evergreen Way in Everett
- 8230 Martin Way East in Lacey
- 22201 Meridian Avenue East in Graham
- 9600 15th Avenue Southwest in Seattle
- 2518 196th Street Southwest in Lynnwood
- 3620 Factory Blvd Southeast in Bellevue
- 11919 Northeast 8th Street in Bellevue
- 7370 170th Avenue Northeast in Redmond
What Is The Financial Position Of Rite Aid?
This is the financial statement of Rite Aid, which will help you better understand the position of the company:
|May 23||Mar 23||Feb 23||Nov 22||Aug 22|
|Total Revenue||$ 5.65B||$ 6.09B||$ 6.09B||$ 6.08B||$5.90B|
|Gross Profit||$ 1.16B||$ 1.17B||$ 1.25B||$ 1.20B||$1.15B|
|EBIT||$-274.46M||$ -55.77M||$-196.40M||$ -10.24M||$-266.79M|
|EBITDA||$-208.56M||$ 12.68M||$-127.95M||$ 59.26M||$-198.23M|
|Net Income Common Stockholders||$-613.44M||$ -1.60B||$-241.31M||$ -67.14M||$-331.29M|
|Cash, Cash Equivalents and Short-Term Investments||$ 135.53M||$ 157.15M||$ 157.15M||$ 103.05M||$ 46.81M|
|Total Assets||$ 7.65B||$ 7.53B||$ 7.53B||$ 8.21B||$ 8.37B|
|Total Debt||$ 6.18B||$ 5.82B||$ 5.82B||$ 6.20B||$ 6.31B|
|Net Debt||$ 6.04B||$ 5.66B||$ 5.66B||$ 6.10B||$ 6.26B|
|Total Liabilities||$ 8.60B||$ 8.17B||$ 8.17B||$ 8.61B||$ 8.70B|
|Free Cash Flow||$-411.88M||$ 234.78M||$ 216.23M||$ 72.71M||$-251.40M|
|Operating Cash Flow||$-372.54M||$ 266.41M||$ 266.41M||$132.61M||$-199.22M|
|Investing Cash Flow||$ -39.35M||$ -14.18M||$ -14.18M||$ -39.97M||$ 3.98M|
|Financing Cash Flow||$390.26M||$-198.13M||$-198.13M||$ -36.40M||$186.00M|
So, is Rite Aid going out of business?
Well, as we discussed, the answer to this is very complicated, as the company has been facing a lot of legal issues, massive debts, and thousands of store closures.
However, the company has only filed for Chapter 11 bankruptcy, which gives businesses the opportunity to restructure their debts and operate under a reorganized plan.
So, overall, bankruptcy doesn’t indicate the company is completely shutting down its operations. Only time will tell whether Rite Aid will sail through the storm or if this is the end of the lane for them.
Is Rite Aid in financial trouble?
Yes, Rite Aid has been struggling to survive in the industry. Now, it has recently filed for Chapter 11 bankruptcy and is now prepared to close 100 more of its stores. a
What is Rite Aid controversy?
In March, the Justice Department accused the company, asserting that it filled prescriptions that were illegal, and Rite Aid also ignored all the red flags of its unlawful prescriptions.
How much debt is Rite Aid in?
According to the U.S. Bankruptcy Court of New Jersey, Rite Aid has $4 billion in debt, $8.6 billion in total liabilities, and $7.65 billion in assets.