A
Rite
Aid
store
stands
in
Brooklyn
on
August
28,
2023
in
New
York
City.
Spencer
Platt
|
Getty
Images
Rite
Aid
filed
for
Chapter
11
bankruptcy
protection
in
New
Jersey
on
Sunday
and
said
it
would
begin
restructuring
to
significantly
reduce
its
debt.
The
company
appointed
Jeffrey
Stein
as
its
new
chief
executive
officer
and
chief
restructuring
officer
as
well
as
a
member
of
its
board.
Elizabeth
Burr
had
been
serving
as
interim
CEO
since
January
and
will
remain
on
the
company’s
board.
Rite
Aid
Chairman
Bruce
Bodaken
said
in
a
statement,
“Jeff
is
a
proven
leader
with
a
strong
track
record
of
guiding
companies
through
financial
restructurings.
We
look
forward
to
benefitting
from
his
contributions
and
leveraging
his
expertise
as
we
strengthen
Rite
Aid’s
foundation
and
position
the
business
for
long-term
success.”
Stein
said
he
has
“tremendous
confidence
in
this
business
and
the
turnaround
strategy
that
has
been
developed
in
recent
months.”
The
beleaguered
drugstore
chain
has
been
grappling
with
slowing
sales,
mounting
debt
and
a
slew
of
lawsuits
that
allege
the
company
helped
fuel
the
nation’s
opioid
epidemic
by
oversupplying
painkillers.
During
its
most
recent
quarter
ended
June
3,
revenue
fell
to
$5.6
billion,
down
from
$6.01
billion
in
the
year-ago
period.
Net
losses
widened
to
$306.7
million,
or
$5.56
per
share,
compared
to
a
net
loss
of
$110.2
million,
or
$2.03
per
share,
in
the
same
period
a
year
earlier.
As
a
result
of
the
rough
quarter,
Rite
Aid
lowered
its
fiscal
2024
outlook
and
warned
investors
it
expects
to
lose
between
$650
million
and
$680
million
for
the
full
year,
which
is
slated
to
end
in
late
February.
Rite
Aid’s
retail
pharmacy
segment
has
long
been
a
key
growth
driver
for
the
company,
but
that
hasn’t
been
enough
to
offset
its
mounting
losses.
Plummeting
demand
for
Covid
vaccines
and
testing,
a
membership
reduction
in
the
company’s
prescription
drug
plan
and
a
loss
of
customers
from
its
Elixir
pharmacy
benefits
business
have
contributed
to
a
slowdown
in
revenue
at
the
struggling
drug
chain.
An
existential
crisis
for
drugstores
Drugstores
like
Rite
Aid
have
faced
an
existential
crisis
as
shoppers
increasingly
turn
to
retailers
like
Amazon,
Target,
Walmart
and
others
for
toothpaste,
shampoo
and
other
staples
—
often
at
a
cheaper
price
and
with
the
convenience
of
delivery
to
customers’
doors.
Rite
Aid
has
also
struggled
to
keep
up
with
its
bigger
rivals,
CVS
and
Walgreens,
as
those
companies
have
pivoted
to
a
health
care
focus
and
made
sizable
investments
to
match.
CVS
has
opened
in-store
Minute
Clinics,
which
resemble
walk-in
urgent
care
facilities,
and
turned
more
of
its
stores
into
HealthHubs,
or
locations
with
a
longer
list
of
medical
services.
It
has
expanded
its
reach
in
health
care
by
acquiring
Caremark,
one
of
the
largest
pharmacy
benefits
managers, health
insurer
Aetna and,
most
recently,
primary-care
company
Oak
Street
Health.
Walgreens
has
also
struck
pricey
deals
to
expand
its
reach
in
health
care.
It’s
become
the
majority
owner
of
primary-care
company
VillageMD
and
plans
to
open
up
doctor
offices
next
to
many
of
its
drugstores.
Newer
—
and
well-capitalized
—
health-care
entrants
have
also
intensified
the
competitive
threat.
Amazon
closed
its
acquisition
of
primary-care
provider
One
Medical
in
a
$3.9
billion
deal
earlier
this
year
and
acquired
online
pharmacy
PillPack
in
2018.
Walmart,
which
has
pharmacies
in
its
thousands
of
stores,
has
opened
a
growing
network
of
medical
clinics
in
parts
of
the
country.
The
opioid
crisis
Rite
Aid’s
financial
position
and
competitive
disadvantages
are
compounded
by
the
many
lawsuits
it’s
facing
that
allege
the
company
contributed
to
the
nation’s
opioid
epidemic
by
knowingly
filling
prescriptions
for
painkillers
that
did
not
meet
legal
requirements.
The
Department
of
Justice
filed
a
suit
against
Rite
Aid
earlier
this
year,
claiming
that
it
violated
the
Controlled
Substances
Act
by
filling
thousands
of
unlawful
prescriptions
for
controlled
substances
such
as
fentanyl
and
oxycodone.
Rite
Aid
has
asked
a
court
to
dismiss
the
department’s
lawsuit
and
denied
allegations
that
it
filled
unlawful
opioid
prescriptions.
—
CNBC’s
Christine
Wang
contributed
to
this
report.
