Rite Aid files for bankruptcy, latest in growing trend

Rite Aid filed for bankruptcy last week, adding to a growing list of companies that are set to fail in 2023. As of the end of September, 516 U.S. companies had filed for bankruptcy, according to S&P Global, more than double the 263 bankruptcies in the first nine months of 2022 and slightly fewer than 518 in the first nine months of 2020, when the Covid-19 lockdown forced many businesses to close their doors. Aside from 2020, the number of bankruptcies this year is the worst since 2010.

Insolvencies increased as companies with low cash reserves were squeezed by inflation and rising interest rates. Companies with weak balance sheets are particularly vulnerable to debt default. Last year, Barron’s flagged seven companies at risk of a liquidity squeeze due to weak cash balances and high short-term debt. Three of the list have filed this year, including Rite Aid.

The drugstore chain has long struggled with declining business, shrinking stores and losses — compounded by lawsuits over its role in the opioid epidemic. Rite Aid said it will close more stores after the filing and sell assets.

Consumer discretionary companies like Rite Aid led the bankruptcy parade, squeezed by e-commerce and belt-tightening shoppers. As of September 64 in the sector have submitted documents. Across all sectors, 18 had liabilities of more than $1 billion, S&P Global noted, including SVB Financial in March, Bed Bath & Beyond in April and SmileDirectClub in September. Get ready for more.

Write to Evie Liu at [email protected]

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Last week


President Joe Biden flew to Israel just after an explosion at a Gaza hospital that the US says was caused by an errant Palestinian rocket. The tension spreads. Markets open strong, then lower as chip stocks take a hit after US imposes restrictions on Nvidia

AI chips made for China. Treasury yields rose again after strong retail sales data, while stocks fell. The House also still needs a speaker. During the week,

Dow Jones Industrial Average

lost 1.6%, on

S&P 500

fell by 2.39%, a

Nasdaq Composite

fell by 3.16%.


Activewear company Lululemon Athletica joined the S&P 500, replacing Microsoft

Activision Blizzard. China’s Country Garden defaulted on its offshore debt after failing to pay $15 million during a grace period. Goldman Sachs reported 33% drop in quarterly earnings, Morgan Stanley

wealth unit slowed, Bank of America beat, Tesla missed, and Netflix added nine million subscribers and raised prices.


Rite Aid filed for Chapter 11, stymied by lawsuits over its role in the opioid crisis, and began selling assets. First: its $575 million pharmacy benefit management business… Albemarle’s $4.2 billion bid for Australian lithium producer Liontown Resources collapsed after iron ore miner Hancock Prospecting built a large minority stake.. .Thermo Fisher said it would buy Swedish protein specialist Olink for $3.1 billion…Wyndham Hotel & Resorts rejected a $7.8 billion acquisition offer from Choice Hotels

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Write to Robert Teitelman at [email protected]

Next week

Tuesday 24.10

Big technological gains opens with results from Alphabet and Microsoft after the market closes on Tuesday. Meta Platforms and Amazon.com follow reports on Wednesday. The four stocks make up about 18 percent of the S&P 500’s weight, according to Dow Jones market data.

General Motors and Ford Motor

two of the three auto makers in Detroit, where the United Auto Workers are on strike, report earnings on Tuesday and Thursday, respectively. Management can provide up-to-date information on conversations with the UAW. The strike also targets Stellantis, Chrysler’s parent company

Thursday 26.10

Busy week for economic data, it begins with an estimate of third-quarter gross domestic product on Thursday and ends with the personal consumer spending price index for September on Friday. Economists see GDP at a seasonally adjusted 3.3% and core PCE, which excludes food and energy prices, rising to 3.6%, according to FactSet.

Friday 10/27

Oil majors Chevron and Exxon Mobil report financial results. The price of crude oil remains below $100 a barrel despite geopolitical turmoil, which may be a major focus for company management.

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