- On Sunday, Rite Aid initiated Chapter 11 bankruptcy protection proceedings in New Jersey and disclosed its intention to undertake a significant debt reduction through a restructuring process. The company also confirmed it had reached an agreement with its creditors regarding a restructuring plan, which encompasses an assessment of its retail presence and the closure of underperforming stores.
- Furthermore, Rite Aid announced that its lenders had consented to extend $3.45 billion in fresh funding to ensure sufficient liquidity during the implementation of its restructuring strategy. The troubled drugstore chain has been grappling with declining sales, escalating debt, and a barrage of lawsuits alleging its role in contributing to the nation's opioid epidemic by oversupplying painkillers.
Why it matters
In its most recent quarter ending on June 3, the company reported a drop in revenue to $5.65 billion, down from $6.01 billion in the same period the previous year. The net loss widened to $306.7 million, or $5.56 per share, compared to a net loss of $110.2 million, or $2.03 per share, in the corresponding period a year earlier.