Bankrupt essential retail brand closing its last remaining stores | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

The retail sector has suffered several devastating bankruptcy filings since late 2024, which has resulted in certain major retail chains permanently disappearing and others significantly downsizing their locations.

A distressed retail environment developed as inflation caused labor and product costs to rise over the last three years. Higher prices were joined by other economic challenges, such as increased interest rates on debt, retail theft, and lease rates that were no longer sustainable.

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Many retailers began closing underperforming stores, and some chains that were in dire financial shape filed for Chapter 11 bankruptcy.

Big Lots filed for Chapter 11 protection on Sept. 9, 2024, in the U.S. Bankruptcy Court for the District of Delaware, seeking to sell its assets to stalking-horse bidder Nexus Capital Management for a $760 million bid, but the deal collapsed by December 2024, prompting the home goods chain to liquidate all 1,392 of its stores.

On Dec. 27, Big Lots agreed to a sale transaction with Gordon Brothers Retail Partners that allowed for the transfer of stores, distribution centers, and intellectual property to other retailers and companies, including a sale of up to 400 stores to Variety Wholesalers, which planned to reopen stores.

Major retailers file for bankruptcy, shut down

Fabric and crafts retailer Joann filed for bankruptcy reorganization for the second time in less than a year on Jan. 15, 2025, and decided to liquidate and shut down all of its stores.

Another major retail chain, teen apparel favorite Forever 21, which struggled financially for years, filed for Chapter 11 for the second time in six years on March 16, 2025, to wind down and close over 350 stores.

Iconic party supply retailer Party City filed for Chapter 11 protection for the second time in two years on Dec. 21, 2024, in the U.S. Bankruptcy Court for the Southern District of Texas, seeking to wind down over 700 store locations in 2025.

Party City still exists on a smaller scale, as 26 locally owned franchise stores still operate, according to the company’s website.

Pharmacy chain Rite Aid filed for Chapter 11 bankruptcy for the first time on Oct. 15, 2023, and closed about 800 of its 2,100 stores in a reorganization.

The drugstore chain surviving entity, New Rite Aid LLC, filed for Chapter 11 protection a second time on May 5, 2025, and began closing all of its stores, consisting of about 1,240 locations.

Rite Aid filed a notice to close 18 more stores.

Image source&colon; Elconin/Bloomberg via Getty Images

Rite Aid closes 18 more stores

Rite Aid filed its final location closing order on July 10 and its 11th notice of additional store closing locations with the U.S. Bankruptcy Court for the District of New Jersey on July 11, seeking approval to close 18 remaining stores and liquidate their assets, which adds to previously designated locations for closing, for a total of 1,202 stores.

It is unclear if or when Rite Aid will file an additional store closing notice or notices for an estimated 38 remaining locations.

More bankruptcy

The debtor’s 11th additional closing notice consists of store closures in 5 states, including Washington (9), Pennsylvania (5), New Jersey (2), California (1), and New York (1).

Rite Aid already filed 11 notices of store closing locations with the original notice and an additional closing notice on May 9, a second additional closing notice on May 15, a third additional notice on May 23, a fourth additional notice on May 30, fifth and sixth additional notices on June 6, a seventh additional notice on June 13, an eighth additional notice on June 20, a ninth additional notice on June 27, and a 10th additional notice on July 3.

The first 11 groups of store closings listed 1,184 locations in 15 states, including California (346), Pennsylvania (346), New York (172), Washington (72), New Jersey (59), New Hampshire (46), Oregon (33), Delaware (29), Virginia (25), Maryland (22), Connecticut (15), Idaho (7), Vermont (5), Massachusetts (4), and Ohio (3).