Another Massive Retailer To Declare Bankruptcy, Close Hundreds Of Stores

By Dave Basner

September 5, 2023

Photo: Getty Images

2023 has been a rough year for many large, nationwide chain stores. Retailers like Bed, Bath & Beyond, Tuesday Morning and Christmas Tree Shops have shuttered all of their locations after declaring bankruptcy, while Sears, Pizza Hut, CVS, Walgreens and Boston Market are closing down stores and restaurants as a cost-cutting measure. Now, another huge chain is preparing to declare bankruptcy and close hundreds of locations.

Rite Aid is getting ready to file for Chapter 11 bankruptcy due to financial challenges, many of which relate to opioid lawsuits. The Wall Street Journal broke the news, noting that the bankruptcy would effectively end the lawsuits. The revelation scared investors and Rite Aid's stock has dropped more than 50%. The chain is also expected to close over 400 locations, but the company is not speaking about their future, saying in a statement, "We do not comment on rumors and speculation."

The biggest issue facing Rite Aid is a lawsuit from the U.S. government over what the Department of Justice feels were red flags that Rite Aid failed to detect around filling opioid and painkiller prescriptions. The company is reportedly facing over a thousand federal lawsuits that have been consolidated into one.

The news isn't too much of a surprise - in Rite Aid's annual report, which was filed in May, they explained, "Although we believe we have adequate sources of liquidity to meet our anticipated requirements for working capital, debt service and capital expenditures through at least the next twelve months, the costs associated with these legal proceedings are impossible to estimate with certainty, could exceed any applicable insurance coverage, and could significantly impact such liquidity."

No word yet on when the company will officially file for bankruptcy or which of its 2,284 stores they will be closing.

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