Rite Aid Files for Bankruptcy, No Immediate Affect on Three Pasadena Stores Foreseen

Rite Aid, the third-largest U.S. chain of drugstores, filed for Chapter 11 bankruptcy protection on Sunday, October 15, amid rising debt and ongoing opioid litigation.

The company’s significant debt, reported to be $8.60 billion as of June 3, 2023, will be managed through the bankruptcy filing. Rite Aid has also secured a commitment for $3.45 billion from some lenders to provide liquidity during the bankruptcy process.

Impact on Pasadena Stores

Rite Aid operates three stores in Pasadena: Rite Aid #06255 at 1038 East Colorado Boulevard, Rite Aid #06344 at 1421 East Washington Blvd, and Rite Aid #05535 at 3745 East Foothill Boulevard.

The bankruptcy declaration is unlikely to have an immediate impact on these stores. However, the company plans to close underperforming stores as part of its restructuring plan. Specific stores to be closed have not been identified.

Company’s Struggles and Restructuring Plan

Rite Aid has been under pressure from lawsuits alleging that it contributed to the U.S. opioid crisis. These lawsuits, along with declining sales and competition from larger peers like CVS and Walgreens Boots Alliance, have played a significant role in the company’s financial struggles.

As part of the bankruptcy plan, Rite Aid appointed Jeffrey Stein as its CEO and chief restructuring officer, replacing interim CEO Elizabeth Burr.

The company also announced plans to close underperforming stores, with employees at these locations being transferred to other stores where possible.

This bankruptcy filing is a significant event in the company’s history. Rite Aid began as a thrift shop in 1962 and grew to become one of the largest chains of drugstores in the U.S., with more than 2,000 retail stores in 17 states.