Rite Aid plans to sell off all of its assets, including Seattle staple Bartell Drugs, as it again files for bankruptcy protection.

The national drugstore chain emerged from Chapter 11 bankruptcy last September after cutting its debt and shuttering stores across the country, including every Bartell store in downtown Seattle. Rite Aid also closed the flagship Bartell in Seattle's University Village shopping center earlier this year.

As of last year, a little less than 100 Rite Aid stores and about 40 Bartell locations were left standing. They'll all be sold or eventually closed as Rite Aid pursues a sale for "substantially all of its assets," Rite Aid said in a statement Monday.

The company will keep its stores open and operating throughout the sale process, with $1.94 billion in new financing commitments to support pharmacy services and employee wages.

CEO Matt Schroeder said in a statement that potential national and regional buyers have expressed interest in the company and its assets.

"As we move forward, our key priorities are ensuring uninterrupted pharmacy services for our customers and preserving jobs for as many associates as possible," he said.

Rite Aid purchased Bartell in 2020 for $95 million, amid a strained time for the drugstore industry. National chains blamed increased theft, reduced consumer demand and a pandemic for drops in revenue and thinner profit margins.

"We felt that this was the only answer," George D. Bartell, former chairman of Bartell, told the Times when the company was sold in 2020. "It was getting more difficult for regional operators to compete in the market."

Bartell faced a tough path after its parent company emerged from bankruptcy last year.

The market still wasn't kind to drugstore chains. Rite Aid's plan had bought them some breathing room but didn't inject adequate financing to revive the company, according to Neil Saunders, a managing director at data analysis company GlobalData.

"It didn't eliminate the debt or the cost of running stores," he said. "And because they didn't have much cash, their stores were just shelves and it started this cycle where customers didn't want to shop there because the stores were bare."

It's not just Rite Aid feeling the pressure. Pharmacy giants Walgreens and CVS are closing stores to settle their balance sheets. The general direction of drugstore chains is downward, Saunders said, but Rite Aid was the weakest of the three.

With fewer than 30 locations remaining, Bartell stores could be sold. But Saunders, a retail industry veteran, expects more closures than sales. The other two big drugstore chains aren't looking to expand their portfolio, and grocery chains that operate pharmacies aren't in the market for stand-alone drugstores.

Walgreens and CVS may look over the portfolio and cherry-pick a few locations, but aren't likely to scoop up a bunch of them.

"For Bartell it's a great shame because it's a good local brand," Saunders said. "I have no idea on Earth why Rite Aid bought them because it kind of represented the death knell for them."

Rite Aid and Bartell's struggles have created pharmacy deserts in the Seattle area, leading to longer travel and wait times for customers. The closure of a Bartell in the Chinatown International District turned a 5-minute walk to the closest retail pharmacy for residents to a 20-minute walk.

If Rite Aid can't sell off its own stores or Bartell locations, it could also add to the glut of retail space in the Seattle area. The company operates about 1.3 million square feet of space in the metro area.

So far, the retail market has been able to absorb pharmacy closures without too much trouble. Elliott Krivenko, director of market analytics for Seattle at CoStar, a real estate analytics company, said that segment of retail has been dynamic lately. Even with a wave of closures over the past few years, landlords have been able to fill up the spaces within about 6 to 8 months as companies like H Mart and Barnes & Noble are in expansion mode.

Some Bartell locations are still vacant, adding a 30,000-square-foot empty box to the neighborhoods they occupy. But prime locations have already been turned around. Din Tai Fung, a popular Taiwan-based restaurant chain, is moving its University Village digs to the former Bartell store in the shopping complex. The shuttered Bartell at Fifth Avenue and Olive Way will become a deli later this year.

However, big box stores like Big Lots, Jo Ann Fabrics and Party City are facing the same struggles as the drugstore industry and are closing stores. Collectively, those companies have vacated about 800,000 square feet of space in the Seattle metro area over the past year.

"If Rite Aid eventually adds another 1.3 million square feet to that, we are starting to really test the market for spaces in the 15,000 to 30,000 square foot range," Krivenko said.

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