Rite Aid closed 22 Philly-area stores in the past year. As bankruptcy looms, more may shutter.

Workers at local Rite Aid stores are awaiting official word on the company’s potential bankruptcy, as details of a possible deal leaked in recent days. But they’ve already begun to feel the impact of the Philadelphia-based pharmacy chain’s financial struggles.

Nearly two dozen Rite Aid locations in the region have closed in the last year, according to the union that represents Rite Aid store employees.

Rite Aid has proposed a bankruptcy plan that would involve closing 400 to 500 of its 2,100 stores in 17 states, the Wall Street Journal reported last week. The company has more than $3.3 billion in debt and is facing over 1,000 lawsuits alleging that it oversupplied opioids, the report noted.

A spokesperson for Rite Aid did not confirm the details of the Wall Street Journal’s report but said the company is “continuing to work collaboratively and constructively with our financial stakeholders to identify the best path forward to reduce our debt and position the business for continued success.”

“Given the conversations remain ongoing, no decisions have been made at this time, and we are focused on reaching an agreement with our financial stakeholders that will make Rite Aid stronger,” chief communications officer Joy Errico said. “We are confident we are taking the right steps to help us succeed, both now and in the future.”

In the Philadelphia area, 22 Rite Aid stores have closed within the last year, out of roughly 200 whose employees were members of the United Food and Commercial Workers Local 1776 union. Fifteen closures were in the city of Philadelphia.

That doesn’t include some very recently planned closures that have not been publicly announced, said Nicole Young, a spokesperson for the local.

Local 1776 president Wendell Young IV said the local’s Rite Aid-employed membership has plummeted by more than 400 people in just over a year. The union had about 2,700 Rite Aid members in mid-2022.

The closures didn’t necessarily lead directly to layoffs, Young made clear. Rite Aid typically allowed the affected employees to transfer to other nearby stores, “but not everyone can do that.” In addition to the closings, he said, the company seems to have slowed hiring, not replacing people who left.

For those who remain, Young said, “It’s a lot of stress on them. Even before this, Rite Aid was understaffed.”

Store employees have heard “a lot of whispering” about the process of a potential bankruptcy, Young said, but “we know nothing official from the company.”

UFCW’s international leadership has already hired bankruptcy counsel to make sure workers’ pensions, health care, and unpaid wages are considered in any plan, Young added. “Bankruptcy is not a friendly process for employees,” he said.

Rite Aid closures have been a regular occurrence in the Philadelphia area and throughout the chain for more than a year.

The company’s leadership said on an investor call this summer that more store closures would be likely, after 25 stores closed in the quarter ending June 3.

In its prior fiscal year, which ended in March, the company closed about 190 stores.

“I don’t have a number of store closures to give you,” chief financial officer Matthew Schroeder said on the June 29 call, “but it’s certainly something we’re going to continue to look at as we think about just how do we drive as much profitability as we can while still maintaining the presence in communities and providing access to our customers and communities.”

Rite Aid became a Philadelphia-based company just last year, when it relocated its headquarters from the Harrisburg area to the Navy Yard. But CEO Heyward Donigan made clear that nobody would be working in that location on a full-time basis, as the company moved toward a “modern way of working.”