Rite Aid To Close Area Stores
Brooklyn Square has another vacancy to be filled.
Rite Aid officials said Monday that the chain is entering a second Chapter 11 bankruptcy, with Buffalo television stations WGRZ and WKBW reporting all of Rite Aid’s New York stores will close. There are 73 Rite Aid locations in Western New York that include stores on Fairmount Avenue in Ellicott and in Brooklyn Square, Jamestown. Rite Aid also owns stores at 1166 Central Ave, Dunkirk and 3795 E Main Road, Fredonia. There are also Rite Aid locations in Mayville, Silver Creek, Salamanca and Gowanda.
The North Main Street Rite Aid location in Jamestown closed in 2023 when Rite Aid closed 145 other stores as financial losses mounted for the struggling pharmacy. That building opened as an Eckerd’s in 2000 and came under Rite Aid’s umbrella when Rite Aid purchased Eckerd Corp. as part of a $3.4 billion cash and stock exchange in 2006. It is still vacant.
Building the Brooklyn Square Rite Aid was a late 1990s development when Rite Aid wanted to move from its location at Third and Main streets – in the building that now houses the Lucille Ball-Desi Arnaz Museum – as well as a store in the Country Bells plaza into a bigger, more modern space with more parking. Rite Aid built both the Ellicott and Brooklyn Square stores at roughly the same time. The Brooklyn Square site was formerly home to the Brookwood Restaurant at 50 S. Main St. The Brooklyn Square Rite Aid opened in 1998, followed quickly by the CVS and Walgreens stores in the same area of the city.
Rite Aid officials said Monday that the company will work to ensure that customer prescriptions are transferred to other pharmacies as it goes through the sale process. The drugstore chain has lined up from some of its lenders $1.94 billion in new financing which helped fund stores remaining open through the sale and bankruptcy proceedings.
An initial statement from Rite Aid said stores will remain open through the bankruptcy process, but a letter obtained by the Buffalo televisions stations said all New York stores are closing, with layoffs starting June 4.
The company initially filed for bankruptcy protection in October 2023, with plans to sell parts of its business and restructure. The company ran more than 2,300 stores in 17 states before the filing.
Rite Aid said then that its initial voluntary Chapter 11 filing would allow it to slash debt and resolve litigation. The company sold its relatively small pharmacy benefits management business, Elixir Solutions, for around $576 million.
Rite Aid emerged from Chapter 11 nearly a year later as a private company. The drugstore chain said in a statement that it came out of the process stronger, “with a rightsized store footprint, more efficient operating model, significantly less debt and additional financial resources.”
Rite Aid’s creditors took ownership of the chain, which shrank to 1,245 stores in 15 states, according to its website.
A spokeswoman said in March that the company was “laser focused” on its retail pharmacies, including restocking its stores.
But in early May, empty white shelves dotted a store that sits a few miles from Rite Aid’s corporate headquarters in Philadelphia, according to the Associated Press. That’s been a sight in the Brooklyn Square store as well.
Retail analyst Neil Saunders told the Associated Press such a look encourages shoppers not to return.
“They’re actively pushing customers away,” said Saunders, managing director of the consulting and data analysis firm GlobalData.
Rite Aid was attempting to turn around its business in a tough environment for drugstores. Major chains and independent pharmacies have been closing stores and struggling with several challenges.
Prescription profitability has grown tight. The chains also are dealing with increased theft, court settlements over opioid prescriptions and shoppers who are drifting more to online shopping and discount retailers.
Walgreens, which has more than six times as many stores as Rite Aid, agreed in March to be acquired by the private equity firm Sycamore Partners.
Philadelphia-based Rite Aid was founded in 1962 in Scranton, Pennsylvania, as Thrif D Discount Center. The company had struggled with debt, posted annual losses for several years and was cutting costs and closing stores well before its initial bankruptcy filing.
Rite Aid also explored sale offers.
Walgreens attempted to buy it for about $9.4 billion a decade ago, when Rite Aid ran more than 4,600 stores. But the larger drugstore chain eventually scaled back its ambition and bought less than half that total to get the deal past antitrust regulators.
In 2018, Rite Aid called off a separate merger with the grocer Albertsons.
– The Associated Press contributed to this report