The list of major retail chains that filed for bankruptcy and went out of business is a long one that includes sporting goods store Sports Authority that failed in 2016, Blockbuster video stores that closed in 2014, book retailer Borders group that disappeared in 2011, and the more recent Chapter 11 liquidations of Bed Bath & Beyond, Tuesday Morning and Mitchell Gold + Bob Williams in 2023.
Not every retailer's Chapter 11 bankruptcy ends up with the company disappearing forever. Iconic department store chain JCPenney in May 2020 filed for Chapter 11 suffering from the effects from the Covid pandemic. The company restructured its debt, exited bankruptcy in December 2020 and continues operating in malls around the country.
Related: Popular retailer in Chapter 7 bankruptcy makes a big deal
In August, the company said it would spend $1 billion through 2025 remodeling stores, upgrading its e-commerce and making its supply network more efficient in a "self-funded reinvestment plan and customer value proposition aimed at fueling long-term growth and increasing customer loyalty and frequency," a statement said.
GNC closed stores and survived bankruptcy
Dietary supplement retailer GNC GNC filed for Chapter 11 in June 2020 saying it would close up to 1,200 stores, but the store survives today with about 4,800 stores. Those stores include over 1,000 franchises, and, ironically, about 1,200 Rite Aid store-within-a-store locations, according to the company's website.
Rite Aid was the latest giant retailer to file for Chapter 11 bankruptcy on Oct. 15. For years, the pharmacy chain for years has competed against CVS CVS and Walgreens Boots Alliance WBA drug retailer Walgreens for prescription business. It has struggled lately against larger pharmaceutical providers such as Walmart WMT and Costco COST, and it is seeing more competition from Amazon.com AMZN and a new venture, Mark Cuban CostPlus Drug Company, which offers discount prescriptions.
The company had been struggling financially for years before the Department of Justice filed a civil lawsuit against the company in March 2023 alleging that its pharmacists inappropriately filled opioid prescriptions, contributing to the opioid epidemic by “repeatedly filled prescriptions for controlled substances with obvious red flags" and it "intentionally deleted internal notes about suspicious prescribers.”
The company filed for bankruptcy protection to trigger an automatic stay of any further legal action in the lawsuit and possibly allow it to negotiate a less expensive settlement that could be over $1 billion without the bankruptcy filing.
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Rite Aid seeks approval to close 178 of its stores
Rite Aid on Nov. 2 filed a notice in the U.S. Bankruptcy Court for the District of New Jersey designating an additional 24 of its stores across the nation for closing. The national pharmacy chain had already identified 154 stores for closing in its bankruptcy case.
The latest group of 24 stores listed for closing consists of eight in Michigan, including one in Detroit; four in Pennsylvania; three in Washington, including three in the Seattle metro area; three in Maryland, including one in Baltimore; two in New Jersey; and one each in California, Delaware, New York and Ohio.
Rite Aid had already filed for an interim order for the first 154 store closings on Oct. 17, which Judge Michael B. Kaplan signed. The order will be final, and all 178 stores can be closed if the court doesn't receive an objection by Nov. 9. If an objection is received, a final hearing will be held Nov. 16 to consider approval of the closings.
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