In recent months, major chains like Joann and JCPenney have announced the closure of multiple stores in the country. These announcements have raised concerns among workers and regular customers. Now, another well-known company joins this wave of cuts in the United States.
It is Rite Aid, the historic pharmaceutical chain based in Philadelphia. The company has confirmed that it will close all its 178 stores in the state of New York. This decision is part of a new bankruptcy process under Chapter 11, the second in just two years.
A crisis that gives no respite
Rite Aid was founded in 1962 in Pennsylvania and once had more than 5,000 locations at its peak. However, recent years have been marked by constant economic losses. Competition from large retailers like Walmart and the growth of online commerce have accelerated its decline.
In the Albany area, there were eleven active Rite Aid stores left, including two in Troy and others located in Saratoga Springs, Amsterdam, and Glens Falls, among others. All of them will close soon, and the company has already suspended services like returns, gift card usage, and point accumulation. Additionally, they will sell the prescription files, without guaranteeing they will be transferred to nearby pharmacies.
Employees of these Rite Aid branches have already received the official notification. A letter from the CEO, Matthew Schroeder, confirmed that layoffs will begin on June 4. Some workers might stay a few more weeks, but most will be laid off within two weeks.
Debts, cuts, and difficult decisions
Schroeder has explained that market conditions have become unsustainable for Rite Aid. The company recently received a notification from a supplier that tightened payment terms, which triggered clauses in its bank loan. As a result, lenders refused to continue financing expenses like payroll.
The company also faces pending lawsuits, higher fees imposed by landlords and suppliers, and an unfavorable economic context, according to Times Union. According to the director, the situation has become too complex to keep operations. Therefore, the only way out they see is to sell all their assets.
It is still unclear whether Rite Aid will find a single buyer or if it will divide its assets among different interested parties. For now, the stores and distribution centers are being liquidated. The closure of all stores in New York marks a new blow for retail in the United States.
The chain Rite Aid thus joins the long list of brands that have not been able to adapt to changes in the sector. The transformation of consumption, rising costs, and digitalization have been determining factors. Although other businesses continue to operate, fewer and fewer can withstand the current pace of the market.