Rite Aid has filed for bankruptcy protection for the second time in less than two years, marking another major setback for the struggling pharmacy chain. Despite securing nearly $2 billion in financing, the company will close all 178 locations in New York State while it searches for a buyer.
Second bankruptcy in two years
On May 5, 2025, Rite Aid confirmed it re-entered Chapter 11 bankruptcy, only seven months after it became a private company. The chain now operates about 1,250 locations, roughly half of what it had two years ago.
CEO Matt Schroeder blamed financial strain, mounting litigation costs, and rising supplier expenses for the decision. He emphasized that the company’s top priorities are to keep pharmacy services running and preserve as many jobs as possible.
Rite Aid said several national and regional buyers have shown interest.
New York State closures
In a letter to employees, Rite Aid announced it would close all 178 New York stores by next month. The closures include 13 stores in Buffalo and 73 across Western New York.
Layoffs will start on June 4, affecting thousands of workers statewide.
Why Rite Aid is struggling
Rite Aid’s problems highlight wider issues facing the retail pharmacy industry. Once the third-largest standalone pharmacy chain in the U.S., Rite Aid fell behind rivals like CVS and Walgreens and struggled to compete with retail giants such as Amazon and Target.
The company’s legal battles over opioid prescriptions also added billions of dollars in debt. Although Rite Aid shed $2 billion in its last bankruptcy, the move was not enough to rebuild its foundation.
Industry expert Neil Saunders of GlobalData said the second bankruptcy was expected. He noted that Rite Aid failed to solve key operational problems and warned that other companies would likely “cherry-pick” stores instead of buying the chain outright.
Industry-wide pharmacy pressures
Rite Aid is not alone. Other major pharmacy chains are struggling, too:
- Walgreens Boots Alliance is going private in a deal worth up to $24 billion after steep market losses.
- CVS has closed more than 1,000 stores and is focusing on smaller, pharmacy-only locations.
Declining prescription reimbursements, heavy competition from online retailers, and increasing theft at stores have all hurt pharmacy profits nationwide.
What customers and employees should know
Rite Aid plans to keep pharmacies open during the bankruptcy process. The company said it will continue filling prescriptions without interruption.
However, customers at closing stores will need to transfer prescriptions elsewhere. Rite Aid employees affected by layoffs can explore job openings at nearby chains or independent pharmacies.
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