Huge retail chains such as Target (TGT) , Walmart (WMT) and Walgreens Boots Alliance (WBA) since the Covid pandemic have closed some of their stores for a variety of reasons, but financial distress leading to bankruptcy has not been the case for these companies.
Theft and organized crime were identified as the reasons why Target in October 2023 closed nine stores in four states. Walgreens in early 2022 and 2021 closed seven stores in San Francisco because of crime. Walmart in 2023 closed 24 stores in 14 states and Washington, blaming underperformance and theft as central reasons for the closures.
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99 Cents Only liquidating in Chapter 11
However, retailer 99 Cents Only is the latest chain to file for Chapter 11 bankruptcy with plans to liquidate all 371 of its stores in California, Texas, Arizona and Nevada. As it liquidates the merchandise in its stores, the company said it will be selling its 377 real estate assets, including 44 owned and 333 leased properties.
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Struggling drugstore chain Rite Aid is trying to stay afloat after filing Chapter 11 bankruptcy to reorganize and close underperforming stores and those with leases that no longer make economic sense.
Rite Aid closes more stores
The bankrupt drugstore chain on April 16 filed a notice in the U.S. Bankruptcy Court for the District of New Jersey seeking to close 13 additional stores located in the East and Midwest. The notice identified six stores in Pennsylvania, three in Ohio, two in New Jersey and one each in New York and Virginia.
Stores are located in Philadelphia, Pittsburgh, Morrisville, New Castle, Pottstown, and Glenolden, Pa.; Toledo, Massillon and Lakewood, Ohio; Berlin and Toms River, N.J.; Flushing, N.Y., and Virginia Beach, Va.
The additional store closures bring the amount of shuttered locations to 322 of the original 2,100 stores that were open when the company filed for Chapter 11 bankruptcy on Oct. 15, 2023.
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Rite Aid, which listed $3.3 billion in debt in its petition, filed bankruptcy facing tight co from rivals including CVS (CVS) , Walgreens Boots Alliance (WBA) , Walmart (WMT) , Costco (COST) , Amazon (AMZN) and investor Mark Cuban's CostPlus Drug.
The company was also a defendant in a civil lawsuit filed against it by the Department of Justice in March 2023. The agency alleged that the chain's pharmacists inappropriately filled opioid prescriptions, contributing to the opioid epidemic.
The bankruptcy filing provided an automatic stay of any further legal action against the debtor in the lawsuit. The company seeks to negotiate a less expensive settlement, which could have amounted to more than $1 billion without the bankruptcy filing.
The drugstore chain has filed several notices for additional store closures since its Oct. 17 motion to reject store leases and close 154 stores. In November and December, it filed notices to reject 55 more stores and in late December and early January, it sought another 45 closures.
The Philadelphia-based drugstore chain filed notices on April 2 to close 30 stores, April 3 to close six locations and April 9 to close 17 stores. The lion's share of closures were in California with 18 of the stores set to be closed. The closure list included 13 in New York, 12 in Pennsylvania, three in New Jersey, two in Michigan, two in Ohio, and one each in Maryland, Massachusetts and Virginia.
The company had also filed a notice to close stores located in Michigan and Ohio on Feb. 27.
