Many retailers that have gone out of business only have their management's decisions to blame. Companies like Toys R Us and Bed Bath & Beyond took on too much debt and were never able to free up the cash to invest in a successful strategy.
It's easy to blame the internet, but the reality is that nearly 85% of retail sales still take place in brick-and-mortar stores. Amazon has taken meaningful business from physical stores, but many people still want to shop in person.
Related: Essential retailer closes more stores in Chapter 11 bankruptcy
There are lots of items where next-day or even waiting on same-day delivery may not be fat enough. Pharmacies should be one of those businesses, but all the major chains have struggled.
Rite Aid has been in Chapter 11 bankruptcy since October and has closed nearly 700 locations. CVS (CVS) and Walgreens (WBA) have managed to stay solvent, but both companies have been closing stores as well.
That's partially something that can be blamed on Covid. The pandemic caused a population shift and that left thousands of pharmacies in locations that lack audience. If you used to pick up your prescription, and maybe a snack, at a pharmacy during your lunch break and you now no longer go into the office most days, that makes it hard for those locations to thrive.
Now, another key healthcare provider that offers an array of services for older Americans is facing financial distress.
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Pennsylvania's Guardian Pharmacy files Chapter 11
Guardian serves a different clientele than CVS, Walgreens, and Rite Aid, or at least it specializes in a different area.
"Guardian Healthcare, based out of Brockway announced Monday that Guardian Elder Care at Johnstown, LLC, doing business as Richland Healthcare and Rehabilitation Center, along with 19 affiliated entities (Debtors) voluntarily filed Chapter 11 bankruptcy in the United States Bankruptcy Court for the Western District of Pennsylvania. The debtors include Guardian Healthcare’s skilled nursing facilities and related pharmacy and rehab businesses in Pennsylvania and West Virginia," WTAJ reported.
The filing is for the Pennsylvania-based company operating using a variation of the Guardian name. It does not include anything related to Atlanta-based Guardian Pharmacy Services, which continues its normal operations and has no affiliation with the company filing Chapter 11 bankruptcy.
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Guardian has significant debt
Guardian Pharmacy filed for Chapter 11 bankruptcy protection on July 29 in the United States Bankruptcy Court of the Western District of Pennsylvania. In the filing, it reported both assets and debts of between $1 million and $10 million.
It also reported that it had between 1 and 49 creditors and funds would be available for unsecured creditors. The filing names dozens of subsidiaries and related businesses that are covered by the filing.
Guardian reported owing the Pennsylvania Department of Human Services nearly $27 million. It also owes Highmark Blue Shield over $3.3 million, according to the filing.
In addition to pharmacy-related services, Guardian operates elder-care facilities.
“First and foremost, the decision to pursue an in-court restructuring was made with our residents’ best interests in mind,” Chief Restructuring Officer Allen Wilen of EisnerAmper LLP, said. “Today’s action provides the relief necessary to enable the Debtors to continue operating with an ongoing focus on resident care and safety while the Chapter 11 cases are pending and to ensure the best outcome for the Debtors, their estates, their creditors, and all other parties in interest.”
More bankruptcy:
- Tinker Toy, Tonka toymaker files Chapter 11 bankruptcy
- Another coffee and cafe company files Chapter 11 bankruptcy
- Distressed home improvement retailer plans Chapter 11 bankruptcy
No financial plan was filed as part of its Chapter 11 bankruptcy petition.
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