Retail locations across the nation have closed their doors amid an ongoing public health crisis and the increasing shift to online shopping.
According to recent reports, Rite Aid has already begun shuttering some of its locations, starting with 63 underperforming stores.
“The first phase of a store closure program”
The company issued a statement explaining that the move is expected to boost profits for the company as a whole. The closures began last month.
This announcement comes after rival pharmacy chains have reached similar conclusions.
In its third-quarter earnings statement, Rite Aid indicated that the strategy is meant to build on a “healthy foundation” that would yield an estimated $25 million in income before interest, taxes, depreciation, and amortization. The company acknowledged that additional locations could still close in the future.
“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,” the company explained.
Workers at the impacted stores will reportedly be given an opportunity to relocate to other locations. The company currently operates roughly 2,400 stores in 17 states. Available reports did not specify which locations will be closing.
“As we evaluate the impact”
CEO Heyward Donigan offered his take during the earnings call, asserting: “The decision to close the stores is one we take very seriously as we evaluate the impact on our associates, our customers, and our communities.”
Although Rite Aid reported a 1.8% increase in revenues compared to last year, it came with a $36 million net loss from continuing operations.
“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,” Donigan said.
As of Tuesday, shares in the company’s stock were down 4% compared to last year. While Rite Aid earns less revenue than top competitors, CVS has also announced plans to shutter about 900 locations over the course of the next three years.
News of the impending closures also coincides with a rash of retail theft across much of California and beyond. Walgreens has reportedly closed some of its locations in cities like San Francisco as a result.