Rite Aid has recently filed for protection from bankruptcy and is preparing to sell part of their business as they attempt to deal with financial losses and opioid-based lawsuits.
The bankruptcy of Rite Aid matters to the people of Keene because we have a Rite Aid nearby. Students may use this Rite Aid to get their prescriptions and may be considering switching to CVS or Walgreens.
According to the Associated Press (AP), Rite Aid said their stores “will continue to fill prescriptions, and customers will still be able to visit its locations or shop online while it goes through its voluntary Chapter 11 process.“
The Philadelphia department posted their 60th year of annual losses, with a net loss of $680 million along with closing stores and cutting costs. This also comes with around $30 million in lawsuits due to opioid prescriptions.
According to AP, in one of these lawsuits, federal officials said there have been “at least hundreds of thousands” of illegal prescriptions filled. Rite Aid called these claims hyperbolic. These lawsuits don’t seem to be ending anytime soon.
Another problem Rite Aid is facing, along with other pharmacies, is a lack of technicians and pharmacy staff and a pharmaceutical and drug shortage. A drug and pharmaceutical shortage brings a bigger workload and a diminishing staff count; due to this, the workload has become unbearable for the employees.
These issues have caused a big blow to Rite Aid, and, with their move into online pharmacy, they’re faced with new competitors like Amazon. CVS and Walgreens are attempting to deal with this by moving into health care by opening clinics and adding other sources of revenue.
Back in 2015 at Rite Aid’s peak, Walgreens offered $9.4 billion to buy just a section of Rite Aid. Now they’re filing for bankruptcy with $8.6 billion in debts and $7.6 billion in assets. Rite Aid is not sure which locations to close, but they plan to transfer workers where they can.
They once had a share price in the high hundreds. Come August they dropped below a dollar and currently are priced at 65 cents.
I feel like, due to these problems, Rite Aid may move to be entirely online rather than going into healthcare like CVS and Walgreens, although I don’t think they’ll do very well compared to online retail giants like Amazon.
I don’t think they are a good investment as a company and are in a bad position financially. Their competitors are doing much better than them; I recommend switching to either CVS or Walgreens.
Rite Aid may make a good position for themselves in the online pharmacy market and distance themselves from this crisis or they may just get out performed by Amazon and get kicked out of the market. Only time will tell how they will get through this.
Fern Gruenfelder can be contacted at
fgruenfelder@kscequinox.com
