(NEXSTAR) – Rite Aid Corporation has filed for bankruptcy protection to reduce its large debt and restructure the company. The move, announced Sunday, comes as Rite Aid is facing financial challenges, including those caused by opioid-related lawsuits.
However, Rite Aid has assured customers that it is not going out of business and will continue to serve customers in stores and online.
“We recognize the important role we play in serving you and meeting your care needs,” Jeffrey S. Stein, newly appointed CEO of Rite Aid, wrote in a letter. your health, so we want to make sure you understand what this means for you.” for Rite Aid customers on Sunday.
Additionally, Stein said customers can still pick up prescriptions, have medications delivered, or even earn or use Rite Aid Rewards points.
According to the online FAQ page regarding the Chapter 11 filing, Rite Aid’s return policy will remain the same and stores are expected to “generally” offer the same products and selections. choose the same.
Meanwhile, Rite Aid has announced that Rite Aid will “accelerate” its efforts to close more underperforming stores — along with its pharmacies — “to further reduce rental costs and increase enhance overall financial performance,” a spokesperson wrote in an emailed statement to Nexstar. .
Gabelli Fund portfolio manager Jeff Jonas, speaking to The Associated Press, said he expected hundreds of locations to close. (Rite Aid has not yet released any estimates.)
In those cases, customers who pick up their medications at Rite Aid locations that are closing will need to begin filling their prescriptions at alternate Rite Aid locations or other nearby pharmacies.
“If your local store is one of those affected, we will do our best to ensure you have access to medical services,” Stein wrote in a letter to customers Sunday. , whether at another Rite Aid or another nearby pharmacy.” “We will also endeavor to deliver appropriate prescriptions so as not to disrupt service.”
Pharmacists and employees at affected stores will be transferred to other Rite Aid locations where possible.
However, Jonas believes that many of the Rite Aid pharmacists and technicians who lost their jobs will be hired “immediately” at other pharmacies or chains like CVS and Walgreens, both of which are facing shortages. personnel.
Rite Aid Corporation has reported annual losses for several years and is cutting costs and closing stores. The Philadelphia-based company said it expects a net loss of about $680 million in the current fiscal year, which will end next spring.
Rite Aid, like its rivals, also faces financial risks from lawsuits over opioid prescriptions. Rite Aid has reached several settlements, including one announced last year with the state of West Virginia for up to $30 million.
In its bankruptcy filing, the company listed total debt as $8.6 billion and assets as $7.6 billion.
Rite Aid said Sunday it had reached an agreement with several major creditors on a financial restructuring plan to cut debt. The company also said it has received $3.45 billion in new financing from several lenders, which will help support the company through the Chapter 11 process.
“Our commitment to you is stronger than ever,” Stein concluded Sunday’s letter. “We are extremely grateful for your business and look forward to serving you for many years to come.”
Rite Aid Corporation currently operates more than 2,000 stores, primarily on the East and West Coasts.
The Associated Press contributed to this report.
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