Rite Aid is grappling with severe debt issues. Previously, the company agreed to pay at least $42 million to settle lawsuits brought by Suffolk County, New York, three other local governments, and the state of West Virginia. However, due to years of ongoing struggles, the company’s traditional retail operations began to incur annual losses starting in 2019.
Last year, Rite Aid filed for Chapter 11 bankruptcy, listing $8.6 billion in debt, nearly $1 billion more than its asset value at the time. Under bankruptcy protection, the company secured a $200 million new loan and agreed to prioritize repayment of over $3 billion in old debts. Additionally, Rite Aid is still striving to sell off its retail business and plans to shutter over 600 stores to ease its debt burden.
These challenges have exacerbated the company’s financial woes, and the bankruptcy filing may represent their final opportunity to address the debt issue.
Rite Aid announced it will close 77 stores in 2024.