Rite Aid to close 31 stores in California following bankruptcy

Rite Aid is closing 154 stores, including 31 across California and two in the Bay Area, following the company’s Chapter 11 bankruptcy filing earlier this week. 

The drugstore chain filed for bankruptcy with the U.S. Bankruptcy Court for the District of New Jersey on Sunday, citing competitive pressures, weakening sales and debt from lawsuits pertaining to the opioid crisis as reasons for the company’s need for a massive restructuring plan. The closures, which have already affected some locations, are part of this plan, according to court documents. 

“The Company’s portfolio is burdened by unprofitable stores that it cannot effectively exit absent the tools available in chapter 11. Those stores challenge the Company’s earnings profile, turnaround initiatives, and free cash flow. Even where the Company has been able to close stores, it is burdened by $80 million in annual ‘dead rent’ costs because of its inability to exit the underlying leases outside of chapter 11,” one of the company’s Chapter 11 filings states. 

The 31 stores that are being shuttered across the state are primarily located in Southern California, including 11 stores in Los Angeles County, six in Orange County, four in San Diego County, two in Ventura County and two in the Inland Empire. 

Only two Bay Area stores are affected, and both are located in the South Bay: the stores at 2620 El Camino Real in Santa Clara and 20572 Homestead Road in Cupertino will be closing, according to court documents. One store in Santa Cruz and another in Monterey will also be closing, along with two in the Sacramento area.

Though a manager at the affected location in Santa Clara was unable to confirm the store’s closure with SFGATE, he did confirm that many items at the store are now on clearance.

“Like all retail businesses, we regularly review each of our locations to ensure we are meeting the needs of our customers, communities and overall business. A decision to close a store is one we take very seriously and is based on a variety of factors, including business strategy, lease and rent considerations, local business conditions and viability, and store performance,” Rite Aid told SFGATE in an emailed statement. 

Customers’ prescriptions will be transferred from affected stores to either a different Rite Aid location or other pharmacies, the spokesperson said.