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 one of its first steps, it says it is closing 154 stores in more than 10 states.
The branches set to be shuttered were detailed in a filing on Tuesday in bankruptcy court in New Jersey. The store closings are meant to help Rite Aid save money on rent and improve its financial footing.
Rite Aid stores in Pennsylvania, California and New York will take the brunt of the closures. About 40 locations in Pennsylvania will be shut. More closings are expected as the company works to rid itself of billions of dollars in debt. It has about 45,000 employees, including 6,100 pharmacists.
Some of Rite Aid’s largest creditors include the pharmaceutical company McKesson and the insurer Humana Health.
Rite Aid’s bankruptcy comes after years of steady declines in 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 across 17 states, well behind its competitors CVS Pharmacy, which has nearly 10,000 stores nationwide, and Walgreens, which has almost 9,000. Rite Aid downscaled considerably after a failed merger with Walgreens in 2017.
As of June, according to company filings, Rite Aid had $3.3 billion in debt, not counting the pending opioid litigation. Its stock has fallen nearly 80 percent since the start of the year.
The company has secured up to $3.45 billion in financing from its lenders to operate during the bankruptcy restructuring, according to a company statement. Rite Aid will sell its pharmacy benefit company Elixir to MedImpact Healthcare Systems.
Jeffrey Stein, who was named Sunday as Rite Aid’s chief executive, said the chain would use the bankruptcy process to emerge as “a stronger company.”