Is Bartell Drugs in Trouble?
Rite Aid’s bankruptcy raises questions
By Rob Smith October 16, 2023
Rite Aid’s bankruptcy was, seemingly, a foregone conclusion.
To no one’s surprise, Rite Aid filed for Chapter 11 bankruptcy protection over the weekend. Company stock had been trading well below a dollar for months, and rumors had circulated that it was heading toward insolvency.
In 2020, Rite Aid acquired Seattle institution Bartell Drugs and its then 67 stores for $95 million. It has since closed several, including one downtown and one in Ballard.
A Rite Aid announcement said some lenders have offered $3.45 billion in new funding, but the bankruptcy filing says Rite Aid has numerous “unprofitable stores.” The bankruptcy gives the struggling retailer the ability to terminate unfavorable leases, saving $80 million in “dead rent” costs.
Bartell’s had a rough ride even before the acquisition. Back in 2015, the 133-year-old family-owned chain hired the first non-family member as CEO. Three years later, it changed CEOs again.
Longtime customers and health care providers have complained of poor service throughout stores and in pharmacies since the Rite Aid acquisition. Bartell’s was thought to be the nation’s oldest family-operated drugstore chain before its 2020 sale.
To be clear, Chapter 11 bankruptcy doesn’t mean that either Rite Aid or Bartell’s will go out of business. Unlike Chapter 7, it’s not a liquidity event. It’s a chance to reorganize.
But, no matter what, this is not a good look for a longtime Seattle institution. It has seemed for a while as if something very special to Seattle has been lost.