Rite Aid is negotiating with creditors over the terms of a bankruptcy plan that would include closing roughly 400 to 500 stores, according to a report in the Wall Street Journal on Friday.
The company operates more than 2,330 drugstores in 17 U.S. states, although it is much smaller than rivals such as Walgreens Boots Alliance and CVS Health.
The company has proposed to liquidate a substantial portion of its more than 2,100 drugstores, and either sell or let creditors take over its remaining operations, according to the report. The talks are ongoing, and no decisions have been made at this time, Rite Aid said.
Rite Aid has been struggling financially for years, and the COVID-19 pandemic has only exacerbated its problems. The company has lost billions of dollars in recent years, and its stock price has plummeted.
The potential closure of hundreds of Rite Aid stores would be a major blow to the company’s employees and customers. It would also leave some communities without a convenient place to buy prescription drugs and other pharmacy services.
It is unclear which Rite Aid stores would be closed if the company files for bankruptcy. However, the company has said that it is committed to working with its creditors to find a solution that is in the best interests of all stakeholders.