Rite Aid stores disappearing in the Sacramento region as part of bankruptcy restructuring
The number of Rite Aid stores is quickly shrinking in the Sacramento region.
The pharmacy chain has closed eight locations in the past several weeks after an October bankruptcy filing.
Rite Aid, based in Philadelphia, is not going out of business but filed for bankruptcy reorganization.
Bankruptcy documents show Rite Aid is $4 billion in debt. Rite Aid said in the bankruptcy filing that it suffered roughly $2.9 billion in losses over the past six years.
As part of a financial restructuring, the company said it is terminating leases for stores the company deems as unprofitable.
The following store locations in the region closed within the past month: Freepoint Boulevard and Fulton Avenue in Sacramento, Sunrise Boulevard in Citrus Heights along with stores in Davis, Roseville, Galt, South Lake Tahoe and Truckee.
Even before its bankruptcy proceedings, Rite Aid was closing stores in the Sacramento region that it said were not making money.
In 2022, Rite Aid closed locations on K Street in downtown Sacramento, F Street in midtown, Folsom Boulevard in East Sacramento and Green Valley Road in Cameron Park.
The most recent Rite Aid closings have meant several hundred new customers for Pucci’s Pharmacy on Folsom Boulevard in Sacramento.
“There are fewer options for people to fill their prescriptions,” said pharmacy owner Joel Hockman.
Hockman, who is also dealing with employee shortages, said the new customers have made it harder on his already busy staff.
He said he feels bad, but he also had to turn away some former Rite Aid customers because his store does not accept their insurance.
A review by The Sacramento Bee found that there are 16 Rite Aid stores left in the Sacramento region.
Why are stores closing
A report two months ago from bond rating agency Fitch Ratings said Rite Aid’s bankruptcy follows years of underperformance compared with its drug retail peers, yielding a weakened competitive position, elevated financial leverage and limited cash flow.
After closing several hundred stores across the U.S., Rite Aid will have around 2,000 stores left, and it will remain the third-largest drugstore chain in the U.S.
But its more visible competitors have many more stores. Walgreens Boots Alliance has close to 9,000 stores and CVS Health has around 6,200 locations.
Fitch Ratings said Rite Aid’s limited cash flow has challenged its ability to stabilize its market share and increase earnings against larger competitors such as Walgreens and CVS.
RiteAid said in bankruptcy proceedings that it had received $3.45 billion in new financing to restructure and position itself for future growth.
But while the company restructures, it is also dealing with opioid-related lawsuits.
Rite Aid in 2022 paid up to $30 million to settle lawsuits that alleged its pharmacies contributed to an oversupply of prescription opioids.
The opioid issue isn’t over for Rite Aid.
The U.S. Justice Department In March of this year filed a lawsuit against Rite Aid, alleging the company ignored red flags and filled hundreds of thousands of unlawful prescriptions for controlled substances from May 2014 to June 2019.
Rite Aid countersued in U.S. Bankruptcy Court in November, arguing that the lawsuit would jeopardize its restructuring plan and should not be allowed to proceed while it is in bankruptcy proceedings.
A decision is still pending.
