Rite Aid files for bankruptcy, set to close more stores

Ceremony Help (RAD) filed for chapter safety on Sunday night time, additional weighing on a inventory that had already tanked as declining gross sales and a looming opioid lawsuit have hung over the retail pharmacy chain.

The corporate stated its Chapter 11 chapter submitting will assist resolve litigation claims in an “equitable method” after the Division of Justice filed a criticism in opposition to Ceremony Help in March for its position within the opioid disaster. The criticism alleged Ceremony Help crammed “a whole lot of hundreds” of prescriptions that did not meet authorized necessities.

Ceremony Help additionally believes submitting for Chapter 11 will assist it trim its retail footprint. Within the submitting, Ceremony Help defined that the chapter course of will assist it stroll away from leases at undesirable areas, noting that the corporate is at present “burdened” by unprofitable shops that it may well’t exit.

“The flexibility to reject leases will enable the corporate to rationalize the shop footprint with better flexibility,” Ceremony Help wrote within the submitting. “It will probably exit unprofitable areas, shed useless hire and use the specter of lease rejection to barter higher lease phrases.”

A Wall Avenue Journal report that Ceremony Help would shut 400 to 500 shops, despatched the inventory stumbling on the finish of September.

Ceremony Help, which as soon as had a market cap of practically $13 billion in 1998, filed for chapter on Sunday with a market cap underneath $40 million. Shares traded about 6% decrease in pre-market buying and selling Monday earlier than being halted.

Ceremony Help stated its raised $3.45 billion in new financing to maintain working whereas going by means of the chapter course of. The corporate additionally employed a brand new CEO, Jeffrey Stein, who may also function the corporate’s chief restructuring officer.

“Ceremony Help has served clients and communities throughout our nation for greater than 60 years, and the necessary actions we’re taking as we speak will allow us to maneuver forward as a stronger firm,” Stein stated within the launch.

FILE - This photo shows a sign of Rite Aid on its store in Pittsburgh on Jan. 23, 2023. Rite Aid, a major U.S. pharmacy chain, said Sunday, Oct. 15, that it has filed for bankruptcy as part of its effort to restructure its finances. (AP Photo/Gene J. Puskar, File)

FILE – This picture reveals an indication of Ceremony Help on its retailer in Pittsburgh on Jan. 23, 2023. Ceremony Help, a serious U.S. pharmacy chain, stated Sunday, Oct. 15, that it has filed for chapter as a part of its effort to restructure its funds. (AP Picture/Gene J. Puskar, File)

Josh Schafer is a reporter for Yahoo Finance.

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