NEW YORK — Rite Aid will close or sell all 178 of its New York stores after filing for bankruptcy protection Monday, marking the pharmacy chain’s second Chapter 11 filing in under two years.
The announcement signals the complete exit of the nation’s third-largest drugstore retailer from New York, where it has operated since 1963.
“This represents a full market withdrawal, not just store optimizations,” said retail analyst Michael Simmons, who specializes in pharmacy sector trends. “The New York operation apparently couldn’t be salvaged even after the previous restructuring.”
Court documents filed in New Jersey federal court reveal Rite Aid secured nearly $2 billion in emergency financing to manage a rapid liquidation process in New York while seeking buyers for prescription records and select leases.
The Philadelphia-based company emerged from its first bankruptcy just seven months ago after eliminating approximately $2 billion in debt, but still struggled under a $2.5 billion debt load.
Most pharmacy locations will remain open through June to facilitate prescription transfers, according to company officials. Rewards points stopped accruing May 6, while gift cards and returns will only be accepted until June 5.
For longtime customers like Joan Martinez, 72, the closures mean disruption of critical healthcare relationships.
“My pharmacist knows all my medications and watches for interactions,” Martinez said outside a Brooklyn location Tuesday. “I’ve been coming here 15 years, and now I have to start over somewhere else.”
Health officials worry the mass closures will create pharmacy deserts across New York, particularly affecting vulnerable populations.
The New York State Department of Health has identified 32 ZIP codes where Rite Aid serves as the primary or sole pharmacy provider. Rural communities in Western New York like Warsaw and Attica will see residents driving 20-plus miles for prescriptions. In urban areas, neighborhoods in Central Brooklyn including East Flatbush and Brownsville will lose multiple locations, worsening access in communities already facing healthcare disparities.
“When the only pharmacy in town closes, it’s potentially dangerous for medication adherence,” said Dr. Elizabeth Chen, public health researcher at SUNY Albany. “Many elderly patients can’t easily travel longer distances for prescriptions.”
New York State Pharmacists Society spokesperson Dr. Sarah Cohen advises patients to contact their Rite Aid pharmacy immediately about transfers rather than waiting for the automatic process.
“Patients should request transfers to their preferred pharmacy now and obtain paper copies of their prescription history,” Cohen said. “Those with complex medication needs should act particularly quickly.”
The court approved an expedited sale schedule with pharmacy assets up for auction May 14 and non-pharmacy assets on June 20. Judge Michael Kaplan will oversee final approvals expected by late June.
Employee layoffs affecting thousands across the state could begin as early as June 4, according to internal communications cited in court filings.
James Williams, a pharmacy technician at a Rochester location for nine years, sees limited options for displaced workers.
“The local job market can’t absorb everyone,” Williams said. “There simply aren’t enough pharmacy positions left in this area. Many of us face career changes.”
This represents the latest challenge for New York’s retail sector, which has seen multiple large chains reduce their footprint in recent years amid changing consumer habits.
Industry experts point to multiple factors behind Rite Aid’s collapse: shrinking reimbursements from insurance companies, intense competition from CVS and Walgreens, growing pressure from online retailers, and ongoing costs from opioid litigation.
The company’s troubled history includes previous financial struggles and an accounting scandal in the early 2000s. Once operating over 4,500 locations nationwide, Rite Aid will maintain fewer than 1,100 stores after the New York exit, primarily in mid-Atlantic and western states.
The bankruptcy proceedings have drawn attention from various stakeholders, including student groups advocating for medication access in underserved communities.
The closure announcement reflects broader transformation in retail pharmacy as smaller chains increasingly struggle against healthcare conglomerates with more diversified business models.
Customers seeking information about prescription transfers should contact their local Rite Aid pharmacy directly, company officials said. The company’s prescription transfer portal remains operational during the bankruptcy process.
