Rite Aid Emerges From Bankruptcy With New CEO
By Isabelle Durso September 4, 2024 4:00 pm
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Rite Aid has emerged from Chapter 11 bankruptcy and has appointed a new CEO as it moves toward operating as a private company, the drugstore chain announced Tuesday.
After filing for bankruptcy in October 2023 and reporting billions in losses, Rite Aid now operates what it describes as a “rightsized store footprint” of about 1,400 stores — down from approximately 2,000 nearly a year ago.
Through the Chapter 11 process, the company said it has eliminated about $2 billion of total debt and received approximately $2.5 billion in exit financing “to support the business going forward.” The company was saved from having to shut down in June after a U.S. bankruptcy judge approved its restructuring plan, Reuters reported.
The drugstore chain will also have a new person at the helm. Jeffrey Stein, who was appointed CEO the day Rite Aide filed for bankruptcy, is stepping down and being replaced by Chief Financial Officer Matt Schroeder, who joined the company in 2000.
“Emergence is a pivotal moment in Rite Aid’s history, enabling it to move forward as a significantly transformed, stronger and more efficient company,” Stein said in a statement.
“We are moving forward with significantly less debt, a more profitable store base and a more efficient operating model to better serve our customers and communities,” a spokesperson for Rite Aid added in a statement to Commercial Observer.
As part of its emergence from bankruptcy, Rite Aid will now operate as a private company — effectively canceling all existing common shares in the company, according to its announcement.
“I am honored to lead Rite Aid on its journey as we continue serving our customers and communities,” Schroeder said in a statement. “Thanks to the dedication of the entire organization, we are beginning our next phase as a transformed company. I see Rite Aid’s remarkable potential, and I look forward to working with the team as we remain committed to our purpose of helping our customers achieve whole health for life.”
Rite Aid isn’t the only drugstore chain that’s experienced blowbacks recently. CVS and Walgreens have been forced to close hundreds of stores and cut costs in the wake of the COVID pandemic, and they’ve also seen employees stage walkouts in opposition to long hours with low pay.
But that’s got nothing on the opioid lawsuits several drugstore chains are facing. Before filing for bankruptcy, Rite Aid itself faced 1,600 lawsuits, including one by the federal government claiming the company filled “suspicious prescriptions for addictive pain drugs,” Reuters reported.
Isabelle Durso can be reached at idurso@commercialobserver.com.
