You may have noticed something while driving around your town over the last few years or so. Retail staples that have been a part of the landscape forever (or that you patronized yourself) are simply disappearing off the map.
Some are tucked into malls, like fast fashion store Forever21, which felt ubiquitous through the 2000s and 2010s. Those bright yellow shopping bags used to be everywhere, but now the chain has closed its doors for good after filing for bankruptcy on March 16 and being unable to find a buyer.
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Others felt even more solid, like Joann Fabrics, which first opened up in 1943. Joann was the place to go for any of your fabric and sewing needs for over 70 years, which was why seeing the company file for Chapter 11 bankruptcy in January 2025 felt like such a big loss for so many of its devoted customers.
Related: Floundering drugstore chain nears Chapter 11 bankruptcy again
Now another huge retail chain is facing some really bad news, and while it’s been wrestling with trouble for quite some time, this new announcement just makes an unfortunate situation that much worse.
Image source: Shutterstock
Rite Aid files for second bankruptcy
U.S. pharmacy chain Rite Aid will file for bankruptcy protection a second time and is planning to cut more jobs, according to an internal letter sent to employees reported in an exclusive by Bloomberg News.
The letter cites CEO Matthew Schroeder, stating that Rite Aid was not able to secure extra capital from lenders that it needed to remain in operation. The chain intends to make job cuts at its Pennsylvania corporate offices.
Related: Major drugstore chain closing hundreds of struggling stores
Rite Aid was considering a second bankruptcy back in April but trying to find a buyer, all while working with Guggenheim Securities to arrange debtor-in-possession financing. Now that it has made the decision to file a second time, it may be forced to sell off its remaining locations or sell itself piece-by-piece in order to meet its debts.
Rite Aid first filed for Chapter 11 bankruptcy on October 15, 2023.Â
Why Rite Aid has lost its foothold
For many years, Rite Aid thrived in the drugstore space alongside similar players like Walgreens and CVS, but faced a new level of competition as big retail entities like Walmart and Costco got into the business of filling prescriptions.Â
It just makes sense to customers to get their prescriptions filled at the same time they shop, eliminating the need to go to a drugstore separately. Or for some, they’ve turned to online pharmacy options such as Mark Cuban’s CostPlus Drug Company or Hims, a direct-to-consumer, subscription-based telehealth platform.
Rite Aid’s stores may still be open, but trouble behind the scenes has been brewing for a long time. The chain made an attempt to sell itself to Walgreens in 2015, but the deal fell through after antitrust concerns led the government to put a stop to it.Â
Rite Aid attempted a similar deal with Albertson’s in 2006 for $9.7 billion, but that deal also did not go through.
Rite Aid competitor Walgreens is also going through its own struggles. Although it has not declared bankruptcy, it did announce a glut of store closings in October 2024, with 1,200 locations planned to shutter. The company said this strategy was to combat struggling retail sales and offset declining profits from low drug reimbursements.
Related: CVS wants to put something creepy into its stores
