Iconic US Retail Chain Filing bankruptcy

Due to its $3.3 billion debt and probable lawsuits regarding opioid prescriptions, American iconic retail chain Rite Aid is getting ready to apply for Chapter 11 bankruptcy protection. The firm has had difficulties throughout its history, with rivals including Bed Bath & Beyond, Tuesday Morning, and Christmas Tree Shops faltering as a result of weak product sales. These chains attempted to file for bankruptcy under Chapter 11 to reorganise, but difficult financial conditions and uncooperative suppliers forced them to file under Chapter 7.

The declaration of bankruptcy by Rite Aid would shield company from claims that it filled hundreds of thousands of opioid prescriptions unlawfully. With revenues falling from $6 billion to $5.7 billion in the most recent quarter, the company has been losing money. Interim Chief Executive Elizabeth Burr aimed to spin this as a positive in her earnings release, stating that the chain has made progress on turnaround initiatives and believes it is on track to achieve adjusted Ebitda growth in fiscal years 2025 and 2026.

A bankruptcy filing would give Rite Aid some protection against the multiple lawsuits it faces, as it hasn’t yet agreed on a settlement for knowingly oversupplying prescription painkillers. The move would likely consolidate the thousands of claims against the pharmacy retailer and allow it to resolve them in one place.