Company to Close 154 Stores, Facing Legal Troubles and Losses
By Keemia Zhang
Pharmacy chain Rite Aid announced last weekend that it has filed for Chapter 11 bankruptcy after a “confluence of operational and financial factors“, and appointed Jeffery Stein as CEO the same day, replacing Elizabeth Burr. 154 “underperforming” store locations will also be closed.
The corporation has garnered $3.45 billion to a creditor-backed restructuring plan amidst several lawsuits and diminishing sales. In the past five years, the stock price has dropped over 96%, with year-to-year revenue down by over $300 million. In the recent fiscal period, CNBC states that the company also suffered a net loss of $1 billion.
Ride-Aid has faced intense litigation relating to opioid prescriptions in light of intensive scrutiny over pharmacy chains as a result of the ongoing opioid crisis. Last year, the company settled up to $30 million in lawsuits that claimed Rite-Aid “contributed to an oversupply of prescription opioids”, according to KTLA 5. Following whistleblower reports, the Justice Department also filed a complaint in March, alleging that the pharmacy filed hundreds of thousands of prescriptions for controlled substances deemed unlawful from 2014 to 2019 despite red flags.
“We remain focused on serving our customers and communities, and we are grateful that they continue to choose our stores and pharmacies for their healthcare needs,” Stein said in a statement. “We thank our associates for their ongoing hard work and dedication, and we extend our gratitude to our partners, suppliers, and vendors for their continued support.”
