Rite Aid Prepares to Sell Itself in Pieces for Second Bankruptcy-OxBig News Network

(Bloomberg) — Rite Aid Corp. is running low on cash and preparing to sell itself in pieces as it heads toward its second bankruptcy, less than a year after the drug-store chain’s emergence from Chapter 11, according to people with knowledge of the situation. 

The liquidity-strapped retailer is seeking a debtor-in-possession loan to help fund itself during the process, said the people, who asked not to be identified discussing a private matter. The process could see some locations in certain regions sold to bidders, while those that aren’t sold would be wound down entirely.

The company is working with Guggenheim Securities for assistance, said some of the people. 

A representative for Rite Aid didn’t immediately respond to a request for comment while Guggenheim declined to comment. 

Rite Aid is among a slew of retail companies that have struggled in the past two years as consumers cut back on spending due to inflation and higher interest rates. Fabric and crafts retailer Joann Inc. won court approval to liquidate itself in February after filing for Chapter 11 for the second time within a year. Party City Holdco Inc. also filed for bankruptcy last year, two years after a first reorganization. 

In March, Rite Aid entered into talks with providers of its asset-based loan to fully access the facility as it needed cash to replenish inventory, Bloomberg reported. In exchange, the company committed to meet certain financial and operational targets and was expected to close more locations. 

Rite Aid emerged from bankruptcy in September after shuttering hundreds of stores, cutting about $2 billion of debt in the process and addressing lawsuits over its role in the opioid pandemic. The company was taken over by creditors and received about $2.5 billion in exit financing to support its operations.

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