Bad news came Monday for Rite Aid employees and New Yorkers who rely on the drugstore chain for their medical prescription needs. More than 175 Rite Aid pharmacies across New York will shut down after the national company says it once again filed for bankruptcy, according to a news release sent out by the company Monday afternoon.

The release states that Rite Aid is now pursuing a "strategic and value-maximizing sale process for substantially all of its assets" and it has voluntarily filed for Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of New Jersey.

A separate letter was sent to inform employees that the company would begin terminations in connection with the closing of specific stores. The first round of "employee separations" will start June 4, according to the letter from Rite Aid CEO Matt Schroeder.

In the letter, Schroeder said its lenders only recently notified the company that funding to cover payroll and employment-related expenses for all of its workforce had been cut.

Schroeder said in part:

“The dramatic downturn in the economy, potential litigation, and increased costs (including tariffs) from our suppliers and landlords have necessitated employee separations that were unforeseen, as we were actively seeking funding and pursuing several alternative strategic transactions with the hope that this action could be avoided or postponed.”

The move will affect employees at Rite Aid’s New York Incorporated, Eckerd Corporation and Genovese Drug Store Incorporated facilities, according to the statement.

The company said employees are eligible to receive job retraining and re-employment services to help find new employment through the state’s Labor Department.

Schroeder issued the following statement in the public news release on Monday:

“For more than 60 years, Rite Aid has been a proud provider of pharmacy services and products to our loyal customers. While we have continued to face financial challenges, intensified by the rapidly evolving retail and healthcare landscapes in which we operate, we are encouraged by meaningful interest from a number of potential national and regional strategic acquirers. As we move forward, our key priorities are ensuring uninterrupted pharmacy services for our customers and preserving jobs for as many associates as possible.

“I will be forever grateful to our thousands of associates for their commitment to Rite Aid and its mission, and I thank our entire team – from store associates to corporate employees – for their dedication to our customers and our company. With their support, we have played a critical role in supporting the healthcare needs of countless Americans across the communities that we are honored to serve.”

Rite Aid said it will work to ensure that customer prescriptions are transferred to other pharmacies as it goes through the sale process. The drugstore chain has lined up from some of its lenders $1.94 billion in new financing which help fund it through the sale and bankruptcy proceedings.

The company initially filed for bankruptcy protection in October 2023, with plans to sell parts of its business and restructure. The company ran more than 2,300 stores in 17 states before the filing.

Rite Aid said then that its initial voluntary Chapter 11 filing would allow it to slash debt and resolve litigation. The company sold its relatively small pharmacy benefits management business, Elixir Solutions, for around $576 million.

Rite Aid emerged from Chapter 11 nearly a year later as a private company. The drugstore chain said in a statement that it came out of the process stronger, “with a rightsized store footprint, more efficient operating model, significantly less debt and additional financial resources.”

Rite Aid’s creditors took ownership of the chain, which shrank to 1,245 stores in 15 states, according to its website.

A spokeswoman said in March that the company was “laser focused” on its retail pharmacies, including restocking its stores.

But in early May, empty white shelves dotted a store that sits a few miles from Rite Aid’s corporate headquarters in Philadelphia. The only rolls of wrapping paper in the store were some Christmas-themed offerings that leaned next to empty shelf space beneath a sign advertising “Great Value!”

The location also had a limited selection of profitable beauty products and drugstore staples such as Q-Tips and cotton balls.

Retail analyst Neil Saunders said such a look encourages shoppers not to return.

“They’re actively pushing customers away,” said Saunders, managing director of the consulting and data analysis firm GlobalData.

Rite Aid was attempting to turn around its business in a tough environment for drugstores. Major chains and independent pharmacies have been closing stores and struggling with several challenges.

Prescription profitability has grown tight. The chains also are dealing with increased theft, court settlements over opioid prescriptions and shoppers who are drifting more to online shopping and discount retailers.

Walgreens, which has more than six times as many stores as Rite Aid, agreed in March to be acquired by the private equity firm Sycamore Partners.

Philadelphia-based Rite Aid was founded in 1962 in Scranton, Pa., as Thrif D Discount Center. The company had struggled with debt, posted annual losses for several years and was cutting costs and closing stores well before its initial bankruptcy filing.

Rite Aid also explored sale offers.

Walgreens attempted to buy it for about $9.4 billion a decade ago, when Rite Aid ran more than 4,600 stores. However, the larger drugstore chain eventually scaled back its ambition and bought less than half that total to get the deal past antitrust regulators.

In 2018, Rite Aid called off a separate merger with the grocer Albertsons.

The Associated Press contributed to this story.