An essential retailer now makes more unexpected closures following after filing for Chapter 11 bankruptcy back in October.
Rite Aid has faced tough competition from CVS, Walgreens, Walmart and Costco for prescription business.
It was also seeing more competition from a new venture, Mark Cuban’s CostPlus Drug Company, which offers discount prescriptions under the name CostPlus Drugs, reports TheStreet.
Rite Aid’s problems grew significantly after the Department of Justice filed a civil lawsuit against the company in March 2023 alleging that its pharmacists inappropriately filled opioid prescriptions, contributing to the opioid epidemic after “repeatedly filled prescriptions for controlled substances with obvious red flags.”
The lawsuit also alleged the company’s workers “intentionally deleted internal notes about suspicious prescribers.”
The company filed for bankruptcy protection to seek an automatic stay of any further legal action in the lawsuit.
Rite Aid planned to negotiate a less expensive settlement that could be over $1 billion without the bankruptcy filing.
As part of its reorganization, Rite Aid filed a motion on Oct. 17 to reject store leases with plans to initially close 154 of its 2,100 stores.
The company expanded that number to 209 on Nov. 2 as it filed a motion to reject another 24 store leases. In early December, it rejected 31 more leases.
However, Rite Aid wasn’t finished there.
It entered 2024 with plans to close another 45 stores after filing motions and obtaining orders from Dec. 26 to Jan. 16 to reject store leases for a total of 254 closures.
The closures of Rite Aid stores nationwide continues to be a developing story.
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Also Read: A US Company Now Declares An Unexpected Bankruptcy
Other Economy News Today
A massive mall retailer is now laying off 2,350 people, or 3.5% of its workforce across the entire United States, sources report.
Macy’s has announced that it will reduce 3.5% of its workforce and has plans to shut down a total of five of its full-line stores.
In a statement sent via email, a spokesperson for Macy’s said, “In anticipation of implementing a new strategy to adapt to the evolving needs of consumers and the market, we have made the tough choice to streamline our company by reducing our workforce by 3.5%.”
Reports indicate that approximately 2,350 corporate positions will be cut by as early as this month.
Supply chain automation, some outsourcing, and faster decision-making were reportedly among the reasons for the cuts.
The Wall Street Journal first reported the news.
Retailers often lay off employees and announce store closures after the holidays, especially if they had a sluggish sales season.
However, Americans spent at a faster clip in December from the month prior, the Commerce Department said this week.
The company opened its first Macy’s in 1858 and now operates about 500 Macy’s branded stores, as well as 55 of the more upscale Bloomingdale’s chain.
In addition to the closures of anchors of five malls in California, Florida, Hawaii, and Virginia, Macy’s will sell and relocate two furniture stores.
A group of investors in December reportedly proposed to take Macy’s private at a vulnerable moment for the famed company. Macy’s has not commented on the activist attempt.
Macy’s has attempted numerous strategies in recent years to revitalize business, such as new brands and smaller stores, but the moves have not altered its long-term trajectory.
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Also Read: This Massive Clothing Company Is Now Closing Stores
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