Drugstore chain Rite Aid said it will shut down more than 60 stores across the United States in the coming months as it reassesses how many locations it needs.
According to an earnings report released by the firm Tuesday, shutting down 63 stores would save the company $25 million per year.
After years of heavy expansion across the United States, Rite Aid, Walgreens, CVS, and other pharmacy chains have struggled, triggering the closure of hundreds of stores—despite the chains having played key roles in distributing and administering COVID-19 vaccines.
Several weeks ago, CVS said it would shut down 900 stores over the next three years as it adjusts to consumers purchasing more products online rather than in brick-and-mortar locations.
“We delivered a solid quarter as we grew adjusted [earnings before interest, taxes, depreciation, and amortization] by 12.7 percent versus last year,” said Rite Aid CEO Heyward Donigan in the earnings release. “Despite challenges in the labor market, our pharmacists and store teams were able to meet the unprecedented volumes for COVID and flu immunizations, COVID testing, and other clinical services, which clearly demonstrates our Lean work to free up capacity is paying off.”
The company reported a net loss of around $36 million for continuing operations as well as a 1.8 percent increase in revenue from the previous year during the third quarter of 2021.
“Today, we also announced the first phase of a store closure program to reduce costs, drive improved profitability and ensure that we have a healthy foundation to grow from, with the right stores in the right locations, for the communities we serve and for our business,” said Donigan, who became the company’s CEO months before the COVID-19 pandemic.
In closing the stores, Rite Aid did not say how many jobs might be impacted. The Epoch Times has contacted the company for comment.
The effort to close stores started last month, the company confirmed.
Rite Aid shares surged more than 17 percentage points in early trading. Before the market closed on Monday, the company’s shares dropped about 22 percent over the past year.
Several months ago, the company said it would move its headquarters to Philadelphia in what it calls a site “designed specifically for in-person collaboration and company gatherings” instead of “office spaces.” Its new “enterprise headquarters” is located n the former Navy Yard in South Philadelphia, it confirmed.
Rite Aid, which was founded in 1962, says it has more than 2,500 retail pharmacy locations across 17 U.S. states.