What Rite Aid’s bankruptcy filing means for customers, prescriptions

(NEXSTAR) – The Rite Aid Corporation has filed for bankruptcy protection to reduce the company’s significant debt and restructure. The move, announced Sunday, comes amid Rite Aid’s ongoing financial challenges, including those posed by opioid-related lawsuits.

Rite Aid, however, assured its customers that it would not cease operations and would continue to serve its customers in-store and online.

“We recognize the important role we play in serving you and meeting your health care needs, so we want to make sure you understand what this means for you,” wrote Jeffrey S. Stein, the new CEO of Rite Aid, in a letter addressed to Rite Aid customers on Sunday.

Additionally, Stein said customers would still be able to pick up their prescriptions, have them delivered, or even accumulate or use Rite Aid Rewards points.

Rite Aid’s return policy will remain the same and stores should “generally” carry the same products and selections, according to an online FAQ page regarding the Chapter 11 filing.

Rite Aid said, meanwhile, that Rite Aid would “accelerate” its efforts to close other underperforming stores – as well as their pharmacies – “to further reduce rent costs and strengthen overall financial performance,” a spokesperson wrote in an emailed statement to Nexstar. .

Gabelli Funds portfolio manager Jeff Jonas, speaking to The Associated Press, said he expects several hundred sites to close. (Rite Aid has not yet provided any estimates.)

In these cases, customers who get their medications at soon-to-be-closed Rite Aid stores will need to begin picking up their prescriptions at other Rite Aid stores, or at other nearby pharmacies.

“If your local store is among those affected, we will do everything we can to ensure you have access to health services, whether at another Rite Aid or another nearby pharmacy,” Stein wrote in Sunday letter to customers. “We will also work to transfer prescriptions accordingly so that there is no disruption to services.”

Pharmacists and affected store employees will be transferred to other Rite Aid locations, if possible.

Jonas, however, believes many Rite Aid pharmacists and technicians who find themselves out of work will be hired “immediately” at other pharmacies or chains such as CVS and Walgreens, both of which would face their own staffing shortages.

The Rite Aid Corporation had been posting annual losses for several years and cut costs and closed stores. The Philadelphia-based company said it expects a net loss of up to $680 million in the current fiscal year, which ends next spring.

Rite Aid, like its competitors, also faces financial risks related to lawsuits over opioid prescriptions. Rite Aid already has several deals, including one announced last year with the state of West Virginia for up to $30 million.

In its bankruptcy filing, the company listed $8.6 billion in total debts and $7.6 billion in assets.

Rite Aid said Sunday it has reached an agreement with some key creditors on a financial restructuring plan aimed at reducing its debt. The company also said it secured $3.45 billion in new financing from some of its lenders, which will help support the company through the Chapter 11 process.

“Our commitment to you is stronger than ever,” Stein concluded in Sunday’s letter. “We are extremely grateful for your business and look forward to serving you for many years to come. »

The Rite Aid Corporation currently operates more than 2,000 stores, primarily on the East and West Coasts.

The Associated Press contributed to this report.