Philadelphia-based drug store chain Rite Aid ( RADon Tuesday said it plans to close 63 stores as part of an effort to reduce costs and boost profitability.

In its third-quarter earnings report, Rite Aid reported a net loss from continuing operations of $36.1 million. The store closures are what Rite Aid calls “the first phase of a store closure program.” The company began closing stores in November.

“We have identified an initial 63 stores for closure,” Rite Aid President and CEO Heyward Donigan announced in a news release.

The closures are expected to save Rite Aid about $25 million.  

There are 2,451 Rite Aid stores in 19 states, so the closures would amount to shutting down around 2% of its locations. The locations of the new store closures have not been revealed.

“The review work will continue, and the company anticipates the number of closures to increase as it finalizes the review over the next several months,” Rite Aid said.

Rite Aid is significantly smaller than competitors like Walgreens and CVS. Rite Aid has a market capitalization of about $795 million, while Walgreens Boots Alliance is valued at about $43 billion and CVS Health Corp. is valued at about $133.3 billion.

Rite Aid's move to close stores follows an industry trend. In November, CVS announced the closure of about 900 stores starting in spring 2022 — 300 stores a year for the next three years — which will amount to 9% of the company’s 10,000 stores.

Since the start of the COVID-19 pandemic, consumers have moved their shopping online, leading to store closures. Customers now prefer filing prescriptions online and using a curbside pickup option.

As of Tuesday at 11:51 a.m. ET, shares of Rite Aid were trading at $14.39, up $1.99, or 16.05%.

31. Heyward Donigan, Rite Aid 31. Heyward Donigan, Rite Aid - Replacing John Standley, Rite Aid has appointed a veteran healthcare executive, Donigan, to become their new CEO. Leading one of the largest drugstore chains in the US, the Rite Aid family has full faith in Donigan’s drive, tenacity, and expertise. “Heyward’s strong senior executive experience, proven leadership capabilities and consistent track record of driving profitable growth, as well as her broad healthcare knowledge and digital shopping technology expertise set her apart,” Bruce Bodaken, chairman of the Camp Hill, Pennsylvania.-based drugstore chain said. Photo: MANDEL NGAN/AFP via Getty Images