The drugstore retail sector has seen hundreds of store closings post-pandemic. Pharmacy chains are cutting costs and reducing losses.
CVS took the lead in 2021, announcing it would shut down 900 of its 9,900 stores. They planned to close 300 stores each year in 2022, 2023, and 2024.
But the closures didn’t stop there. Competitors' bankruptcies added to the tally, starting with Rite Aid’s Chapter 11 filing on October 15, 2023.
The Philadelphia-based chain filed after the U.S. Department of Justice intervened in a whistleblower lawsuit. The suit, under the False Claims Act, accused Rite Aid of knowingly filling unlawful prescriptions for controlled substances.
At the time of its bankruptcy, Rite Aid had about $3.3 billion in debt. Facing a potential opioid settlement that could add $1 billion more, the company opted for Chapter 11 to negotiate a deal.
Rite Aid quickly rejected leases and closed 154 locations. Now, as it nears the end of Chapter 11, it has shuttered more than 520 of its 1,200 stores.
Smaller pharmacy chains are also struggling. Competing against CVS, Walgreens, and Rite Aid, many have had to file Chapter 11 to survive.
CL Cressler Inc., the owner of seven Medicine Shoppe Pharmacy stores in Pennsylvania and New York, filed for Chapter 11 bankruptcy on August 29.
The Camp Hill, Pa.-based company aims to reorganize its debts. They reported over $1.5 million in assets but face liabilities exceeding $12.2 million.
The company stated that funds would be available to distribute to unsecured creditors.
Among the largest creditors are Commercial Finance Group, owed $6 million, Carol and Clyde Cressler, owed $3.7 million, and Cardinal Distribution, owed over $1.2 million.