Rite Aid Corp. (Philadelphia) has entered Chapter 11 bankruptcy, while Party City (Woodcliff Lake, N.J.) has exited it. The large pharmacy chain, which has been plagued by falling sales and numerous lawsuits claiming it filled thousands of illegal prescriptions for painkillers, said in its filing that it had received a commitment for $3.45 billion in new financing from certain of its lenders and that it will close an as-yet-undisclosed number of 2100 existing stores that are determined to be underperforming financially.
In addition, the company has named Jeffrey Stein as CEO, Chief Restructuring Officer and a member of the company’s board, effective immediately. He succeeds Elizabeth Burr, who has served as Interim CEO since January 2023.
Stein, who runs a financial advisory firm that provides consulting services to public and private companies experiencing significant challenges, said, “Rite Aid has served customers and communities across our country for more than 60 years, and the important actions we are taking today will enable us to move ahead as a stronger company. With the support of our lenders, we look forward to strengthening our financial foundation, advancing our transformation initiatives and accelerating the execution of our turnaround strategy. In doing so, we will be even better able to deliver the healthcare products and services our customers and their families rely on – now and into the future.”
Meantime, Party City Holdco Inc., operator of Party Center stores, said it has completed its restructuring process and emerged from Chapter 11 “financially stronger and well-positioned for the future.” As part of its makeover, the retailer closed about 60 stores, leaving it with about 800.