Rite Aid Files for Bankruptcy (Again), Plans Dozens More Store Closures
May 12, 2025 • 5 min read
Rite Aid has filed for Chapter 11 bankruptcy protection for the second time in two years, marking another low point for the embattled pharmacy chain and pushing the company into a fast-tracked asset sale that will reshape what remains of its retail footprint.
The company has already closed or sold 29 locations and transferred the prescription files from another 63 stores. Now it plans to shutter at least 47 additional underperforming stores, citing financial stress and lack of buyer interest. With thousands of stores reduced to a shrinking core, the company is no longer attempting a turnaround so much as a controlled exit.
“It’s a limited market for Rite Aid’s pharmacy assets,” said Sarah Foss, head of legal at Debtwire. “They can generally only be sold to licensed and registered pharmacies, and any delay risks eroding value as customers leave.” She added that a “long, drawn-out sale process could be the death knell for Rite Aid.”
To avoid that, the company is moving fast. An auction for pharmacy assets is scheduled no later than May 14, with the rest of the company’s holdings set to be auctioned by June 20. Bankruptcy court approvals are expected within a week of each sale. Foss noted that a court-run sale “allows buyers to purchase assets free and clear of liens, claims and encumbrances in a transparent process.”
This marks the 14th company to file Chapter 11 for a second time since 2024, and the fifth in 2025 alone, highlighting growing pressure in the retail and healthcare sectors. Rite Aid’s collapse follows a string of closures by rival chains including CVS and Walgreens, both of which have also downsized in response to oversaturation, declining foot traffic, and growing labor and regulatory costs.
“The industry seemed to be growing footprints faster than the need for pharmacies was growing,” said George Hill, managing director and senior equity research analyst at Deutsche Bank. “There was a clear mismatch between capacity and demand.”
Rite Aid’s problems, however, run deeper than sector-wide misalignment. The company entered 2024 with a heavy debt burden and limited flexibility. Years of underinvestment in store experience, digital infrastructure, and backend operations left it poorly positioned to compete as consumer habits changed. And with larger players already pulling back, Rite Aid had fewer cards to play.
Once a national brand with thousands of locations, the company’s footprint is now a shadow of what it was just 18 months ago. Its second bankruptcy all but confirms what many in the industry suspected: there was no real path back.
The company says it’s still exploring “strategic alternatives,” though most observers believe the sale of assets is all that remains. How many stores survive the process—and who buys what’s left—will determine whether Rite Aid can emerge in any form recognizable to customers or investors. As of now, its Chapter 11 filing looks more like a wind-down than a restructuring.