(NEXSTAR) – The Rite Aid Corporation has filed for bankruptcy protection in order to reduce the company’s sizable debt and restructure. The move, announced Sunday, comes amid Rite Aid’s ongoing financial challenges, including those posed by opioid-related lawsuits.
Rite Aid, however, has assured customers that it is not going out of business, and will continue to serve customers in-store and online.
“We recognize the important role we play in serving you and meeting your healthcare needs, so we want to make sure you understand what this means for you,” Jeffrey S. Stein, the newly appointed CEO of Rite Aid, wrote in a letter addressed to Rite Aid customers on Sunday.
In addition, Stein said customers would still be able to pick up prescriptions, get them delivered, or even accrue or use Rite Aid Rewards points.
Rite Aid has stated, meanwhile, that Rite Aid would be “accelerating” its efforts to close additional underperforming stores — along with their pharmacies — “to further reduce rent expense and strengthen overall financial performance,” a spokesperson wrote in an emailed statement to Nexstar.
Gabelli Funds portfolio manager Jeff Jonas, speaking with the Associated Press, said he expects several hundred locations to close. (Rite Aid has not yet provided any estimate.)
In those cases, customers who obtain their medication at soon-to-be-shuttered Rite Aid locations will need to begin picking up prescriptions at alternate Rite Aid locations, or other nearby pharmacies altogether.
“If your local store is one of those that is affected, we will make every effort to ensure you have access to health services, whether at another Rite Aid or other nearby pharmacy,” Stein wrote in Sunday’s letter to customers. “We will also work to transfer prescriptions accordingly so that there is no disruption of services.”
Pharmacists and employees at affected stores will be transferred to other Rite Aid locations, if possible.
Jonas, though, believes many of the Rite Aid pharmacists and technicians who find themselves out of jobs will get hired “immediately” at other pharmacies or chains such as CVS and Walgreens, both of which are reportedly facing their own staffing shortages.
The Rite Aid Corporation had posted annual losses for several years and has been cutting costs and closing stores. The Philadelphia-headquartered company said it expects a net loss of as much as $680 million in the current fiscal year, which will end next spring.
Rite Aid, like its rivals, also faces financial risk from lawsuits over opioid prescriptions. Rite Aid already 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 $8.6 billion in total debts and $7.6 billion in assets.
Rite Aid said Sunday that it had reached an agreement with some key creditors on a financial restructuring plan to cut its debt. The company also said it obtained $3.45 billion in fresh financing from some of its 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 tremendously grateful for your business and look forward to serving you for many years to come.”
The Rite Aid Corporation currently runs over 2,000 stores, mostly on the East and West Coasts.
The Associated Press contributed to this report.