• by Sarah Mahoney  @mahoney_sarah, Yesterday

Rite Aid is on the ropes again. The struggling drug retailer has filed for bankruptcy again and says it will strive to keep most of its stores open while seeking a buyer. And while the company says “a number of potential national and regional strategic acquirers” have expressed an interest, observers say this is not likely to be an easy sale.

The company is already a vastly slimmed-down business. After filing for bankruptcy in October of 2023, Rite Aid secured $2.4 billion in funding and closed 500 stores, bringing the total to just 1,250, half its prior size. The company emerged from bankruptcy just eight months ago. And news outlets are reporting that Rite Aid will close every store in New York state.

As Rite Aid looks for a lifeline, the Philadelphia-based chain is facilitating the “smooth transfer” of customers' prescriptions and plans to keep many stores open. And it has secured $1.94 billion in new funding to help keep stay afloat.

Rite Aid’s plight is the latest evidence of just how brutal the retail drug landscape has become in an era of declining drug reimbursements and expensive legal battles for filling unlawful opioid prescriptions.

CVS, the largest drugstore chain with a 25.1% share of prescription revenue, according to Drug Channels Institute, closed 900 stores between 2022 and 2024 and announced an additional 270 closures this year.

Walgreens, the second largest with a 14.6% share, is staggering under heavy losses. Several months ago, Sycamore Partners, a private equity company, swooped in and rescued it in a $10 billion private equity deal.

Rite Aid ranks a distant third in stand-alone rankings and 8^th in overall prescription drug revenue, with a 1.5% share.

“The second bankruptcy of Rite Aid comes as no real surprise,” writes Neil Saunders, an analyst with GlobalData Retail. “The first bankruptcy did little to resolve the chain’s issues, and it has been teetering on the edge of survival for quite some time.”

Rite Aid found itself caught in the familiar downward spiral: Because of the company’s financial struggles, wary vendors make it harder to get inventory. Customers are turned off by empty store shelves and find someplace less depressing to shop. “Sadly, the chain has now reached the bottom of this vicious cycle, and bankruptcy is the only route available,” Saunders says.

He points out that other drug chains are wrestling with their own problems, so buying the troubled Rite Aid will likely be appealing. And while a wild card -- such as Amazon -- might materialize, “the most likely outcome is that other chains will cherry-pick Rite Aid stores.”