Rite Aid is set to close more than 175 pharmacies across New York state, according to a company letter sent to employees Monday. The decision comes as the company plans to file for bankruptcy protection again.
Employee separations related to these closures will begin June 4, the letter stated. Matt Schroeder, Rite Aid CEO, cited intensifying financial challenges as the cause. He pointed to a rapidly changing healthcare and retail landscape.
Schroeder informed employees that lenders had recently notified the company that funding for payroll and employment-related expenses had been cut.
The letter detailed further financial pressures contributing to the need for job cuts. These included a downturn in the economy, potential litigation, and increased costs from suppliers and landlords. The company had been seeking funding and pursuing alternative strategic transactions. They hoped to avoid or postpone these actions.
Operations affected include facilities associated with Rite Aid’s New York Incorporated, Eckerd Corporation and Genovese Drug Store Incorporated.
Rite Aid stated that employees are eligible for job retraining and re-employment services through the state's Labor Department.
The announcement follows recent corporate developments. Rite Aid Corporation announced it is pursuing a strategic sale process.
Matt Schroeder was appointed Chief Executive Officer following the company's emergence from Chapter 11. He previously served as Chief Financial Officer. This appointment came after Jeffrey S. Stein stepped down as Chief Executive Officer and Chief Restructuring Officer. Rite Aid last filed for bankruptcy protection in October 2023.
