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Oct. 16 (UPI) -- Pharmacy retailer Rite Aid filed for Chapter 11 bankruptcy protection as it struggled with rising debt, falling sales and intense competition from rivals like Walgreens and CVS. The filing in U.S. district bankruptcy court in New Jersey on Sunday said it had agreed with creditors on a restructuring plan that allows it to close slumping retail locations while reducing its debt, some from lawsuits connected with the opioid crisis.
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"Implementing the contemplated restructuring plan will significantly reduce the company's debt, increase its financial flexibility and enable it to execute on key initiatives," a statement from Rite Aid said.
"Rite Aid is continuing to deliver leading healthcare products and services across its retail and online platforms for the nearly one million customers it serves daily. The company remains committed to improving health outcomes and delivering on its purpose to help people achieve whole health for life."
During its latest quarter report, Rite Aid said its revenues tumbled from $6.01 billion in 2022 to $5.6 billion this year. Stocks have fallen from $5.56 per share a year ago to $2.03 per share.
Along with closing underperforming stories and its deal with creditors, Rite Aid said it will access additional liquidity and resolve other litigation claims. Rite Aid said it has appointed Jeffrey S. Stein as CEO to help them through the bankruptcy process.
He replaces interim CEO Elizabeth "Busy" Burr, who will continue her role as a director on Rite Aid's board.
"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," Stein said in a statement.
"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."
Rite Aid said it will make its decision on closing stores based on meeting the needs of its customers, communities and associates.
"The company will continue assessing its footprint and close additional underperforming stores," Rite Aid said. "These efforts will further reduce the company's rent expense and are expected to strengthen its overall financial performance."
