Why is Thrifty Ice Cream shutting down 500 stores? Reason explained

Thrifty Ice Cream, first launched in West Hollywood in 1940, is closing five hundred stores. The decision reportedly came after its parent company, Rite Aid, filed for Chapter 11 bankruptcy.

As per the United States Courts website, Chapter 11 bankruptcy

"generally provides for reorganization, usually involving a corporation or partnership. A Chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time."

This gives Rite Aid, which bought the brand in 1996 and has been selling it at counters inside many of its stores, a chance to reorganize its business.

As reported by Mint, the five hundred outlets cannot be sold separately and have to be closed. This is because they operate exclusively within Rite Aid pharmacy stores.

Who does Thrifty Ice Cream work with?

A statement on the brand's website says,

"You can find Thrifty ice cream in the freezer section of your favorite retailers, like Rite Aid, Albertsons, Vons and more. You can also find it at scoop counters across California, Arizona and a growing number of regions in the U.S. and Mexico."

The website additionally says,

"We work with several distributors and retailers who serve Thrifty ice cream to their customers."

Although around five hundred ice cream counters inside Rite Aid stores are closing, the brand itself is not shutting down. Thrifty Ice Cream will continue to be sold in retailers like Albertsons, Vons, and other distributors. Some independently operated scoop counters may also remain open across California, Arizona, and other regions.

As for now, Rite Aid is reportedly selling the ice cream brand to a new buyer as part of their bankruptcy and using it as a resource to pay the debts. Its future, however, depends on whether the new buyer can successfully manage and grow the brand.

As of now, there are over twelve hundred Rite Aid stores in the United States, which they plan to close while filing for bankruptcy. Earlier this month, Rite Aid also sold many of its pharmacy services to other big chains like Albertsons, CVS, Kroger, and more. This step is part of the company’s plan to deal with its money problems and make its business more stable.

This marks Rite Aid’s second bankruptcy filing in less than two years, with the first occurring in 2023.

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