The basics:

• Rite Aid to close two New Jersey stores in May
• NJ workforce to lose 1,122 jobs as part of mass layoffs
• Nearly all 1,240 stores across 15 states are up for auction
• Bankruptcy court approves expedited sale of pharmacy assets

At least two Rite Aid stores in New Jersey will be among the first round of closures connected to the retail pharmacy chain’s recent Chapter 11 bankruptcy.

Just a day after its May 5 filing in U.S. Bankruptcy Court for the District of New Jersey, Philadelphia-based Rite Aid revealed plans to shutter 47 underperforming locations this month across the U.S. as part of its initial wind down. Within New Jersey, that includes sites in Neptune and Sicklerville.

Another wave of closings will reportedly begin in June and will impact about 1,000 outposts nationwide, according to CoStar News.

Additionally, New York-headquartered A&G Real Estate Partners has put nearly all of Rite Aid’s 1,240 stores across 15 states on the auction block. Of the available sites, 1,194 are leased locations and 50 are fee-owned properties.

The list includes Rite Aid’s entire New Jersey footprint of 60 stores as well as a distribution center in Delran.

The 63-year-old chain’s 23,144-square-foot headquarters on Intrepid Avenue in Philadelphia is also marketed for sale.

As Rite Aid prepares to close stores and sell assets, it will begin mass layoffs in New Jersey. In a filing with the state Department of Labor & Workforce Development, the company said it will eliminate 1,122 positions at its Garden State locations and its Philadelphia corporate office on a rolling basis starting June 4.

Everything must go

In seeking bankruptcy for the second time in less than two years, Rite Aid said it is pursuing the sale of “substantially all” assets. Any part of the company that is not sold will be divested or monetized, it said.

Rite Aid said it acquired $1.94 billion in new financing to keep stores operating during the proceedings. While the company goes through the court-supervised process, employees will continue receiving pay and benefits, the company also said.

Customers will be able to continue accessing pharmacy services and products, both online as well as at Rite Aid stores nationwide. However, the company is working to transfer prescriptions to other pharmacies.

The Associated Press noted that while stores are open, the company isn’t buying new inventory, so bare shelves will likely become more common.

During a May 7 court hearing in Trenton, U.S. Bankruptcy Judge Michael Kapan signed off on Rite Aid’s request for an expedited sale. In granting the motion, Kaplan said he believes the company needs to quickly line up buyers to ensure a seamless transfer for prescription services for its 8 million customers, Reuters reported.

Under the sale procedures approved by Kaplan, bids for pharmacy assets are due by May 13. The company will then seek final approval of one or more sales at a May 21 court hearing, according to a timeline posted on Rite Aid’s restructuring website.

Closing doors

Rite Aid’s initial bankruptcy filing in October 2023 came amid falling sales and heavy debt from 1,600 lawsuits – including one from the federal government – that accused the company of contributing to the deadly U.S. opioid epidemic.

Since then, it has closed more than 500 pharmacies nationwide, including three dozen locations in New Jersey.

Rite Aid emerged from bankruptcy in September 2024 with a reduced brick-and-mortar presence, decreased debt, new executive leadership and $2.5 billion in exit financing to support the business going forward. Additionally, Rite Aid now operates as a private company with ownership held by many of its creditors.

In its newly filed Chapter 11 petition, Rite Aid listed liabilities in the range of $1 billion to $10 billion. The company said poor performance in its retail business has made it difficult to maintain sufficient cash flow and keep inventory stocked.