Rite-Aid looks to close its Smithfield store

Published 8:22 pm Thursday, December 28, 2023

As part of its Chapter 11 bankruptcy filing, Rite-Aid Corp. is seeking court approval to allow it to close 19 additional stores nationwide, including its Smithfield pharmacy.

In the retailer’s Dec. 19 filing with the U.S. Bankruptcy Court for the District of New Jersey, the Rite-Aid store at 1200 Benns Church Blvd. is one of three additional Virginia locations the company wants to shutter. The state’s other stores most recently selected to close are located in Richmond and Portsmouth.

A hearing on the closure plan is expected to be part of the next omnibus bankruptcy hearing on Jan. 8 or one listed as specific to store closings set for Jan. 9, according to the court’s online docket in the case.

Anyone seeking to object to the new list of Rite-Aid store closings can file an application and serve a written objection with the court no later than Dec. 29.

If an objection is timely filed and not withdrawn or resolved, the filing states “such objection will be considered at the next regularly scheduled omnibus hearing, subject to the rights of any party to seek relief on an emergency basis or shortened notice.”

Smithfield Mayor Steve Bowman said the expected loss of Rite-Aid is unfortunate for the town.

“We are truly disturbed by the possibility of losing a valuable piece of our community that provides a much-needed service to our citizens,” Bowman said. “In a time when our community is growing, we cannot afford to lose an establishment that is integral to our citizens’ health and well-being. We will be working with Isle of Wight Economic Development Authority in an attempt to mitigate this potential loss”.

The recent filing states Rite-Aid has “determined, in the exercise of their business judgment, that each store location listed in Exhibit 1 attached hereto shall be an Additional Closing Store.” The Smithfield location is the first on the list, which includes stores in Pennsylvania, California, Ohio, New York, New Jersey, Delaware and Michigan.

Rite-Aid previously won the court’s approval to close 154 locations through an order issued by the bankruptcy court Nov. 20. Two of those locations were in Virginia, both in Chesapeake.

Rite-Aid announced its plans to voluntarily enter Chapter 11 bankruptcy Oct. 15 to financially restructure the company. Several national media outlets have reported that the company’s debt had reached between $3.5 million and $4 million.

As part of a Rite-Aid corporate email, the company reported it had reached an agreement in principle with “certain of its senior secured noteholders” on the terms of a financial restructuring plan that will allow the company to accelerate its ongoing business transformation, according to the company’s news release. It went on to state that implementing the restructuring plan will significantly reduce the company’s debt, increase its financial flexibility and enable it to execute on key initiatives.

As part of the restructuring plan, Jeffrey S. Stein was tapped as Rite-Aid Corp.’s new chief executive officer, chief restructuring officer and a member of the company’s board of directors.

“The court-supervised process provides Rite Aid with legal tools to accelerate our footprint optimization in an efficient and orderly manner,” Stein said in the release. “We look forward to working closely with our landlords to determine the best path forward for each of our stores.”

The Times reached out to Rite-Aid media relations for comment on the plan to close the Smithfield pharmacy but has not received a response.