Drugstore chain Rite Aid has disclosed the amount of store space it initially plans to close. But that's only the first round of brick-and-mortar shutdowns industry professionals expect, based on the retailer's filings and attorney statements in its Chapter 11 bankruptcy proceedings.

The Philadelphia-based retailer has put in motion its plan to optimize its physical footprint of about 2,100 stores across 17 states. That process includes not only shutting underperforming stores, but attempting to renegotiate better terms for leases with landlords for other locations. In addition, bids for part of a batch of store leases are due Wednesday as Rite Aid says in court documents it sees trimming its store fleet as crucial to the company's successful financial reorganization.

The retailer filed for bankruptcy protection about a week ago in New Jersey, a move Rite Aid said was necessary because of a crushing debt load, battering from a growing group of competitors, and a deluge of pending lawsuits alleging that it oversupplied prescription pain killers, contributing to the nation's opioid epidemic.

"With the company expected to trim down the store base to at least 1,700, we expect more lease-rejection requests to follow," data analytics firm RetailStat said on LinkedIn in the past week.

The scope of Rite Aid's store closings is the subject of speculation because Chapter 11 petitions have ended up very differently this year for two U.S. retailers, both based in the Garden State. Bed Bath & Beyond, headquartered in Union, ended up in liquidation, with the chain shutting all its locations. By contrast, Party City, based in Woodcliff Lake, shuttered a couple of dozen stores and remains in business.

Rite Aid's path is still undetermined, but the company warned last week it may be forced to go out of business and liquidate if its bankruptcy plan fails. It also reported roughly $1 billion in losses in the most recent quarter as competition picks up in an industry where property costs are closely watched.

Rite Aid is dealing with upheaval in the pharmacy industry as retail giants including Amazon, Walmart and Kroger enter the arena. And dominant drugstore chains Walgreens Boots Alliance and CVS Health have also been closing locations as they expand into offering healthcare services.

Rite Aid has won interim approval from U.S. Bankruptcy Judge Michael Kaplan to close and hold liquidation sales at 154 stores. In addition, Rite Aid's real estate adviser, A&G Real Estate Partners, is solicting bids on 99 locations — either retail leases for or stores actually owned by the company. Factoring out overlap, the A&G list has roughly 40 stores that aren't on the official initial closing list.

And finally, Rite Aid has submitted to the bankruptcy court a list of more than 300 store locations where it wants to reject unexpired leases.

At this point, the number of stores that Rite Aid will ultimately shut hasn't been determined, but it appears to have already surpassed the initial closing list of 154. For example, the requested lease rejections include only 95 stores that are currently operating, with the remainder already closed, according to RetailStat. And then there are the 40 leases — part of the total 99 being auctioned, but not on the official closing list — that A&G is accepting bids on.

A&G referred questions on the store closings and lease auctions to Rite Aid, which didn't respond to an email from CoStar News seeking a comment. In September, before the Chapter 11 filing, The Wall Street Journal reported that Rite Aid was looking to close 400 to 500 stores. But the retailer has never confirmed that number.

The Chapter 11 proceeding allows Rite Aid to reject unexpired leases that could have many years left without being responsible for the remaining rent, according to Daniel Gielchinsky, a Florida-based bankruptcy lawyer who is not involved in the Rite Aid case.

“You can walk away from a lease you don’t want any more with a minimal financial cost,” Gielchinsky told CoStar News. "The stores just aren’t performing. It’s just not worth keeping them open. Every day ... it costs more money to keep the store open and keep the lights on and pay employees than you’ll make from the store.”

If a store on the lease-rejection list is still open, landlords wanting to keep Rite Aid as a tenant may offer to renegotiate the lease and give the retailer better terms to keep it, according to Gielchinsky. Or if Rite Aid is paying a below-market rent, the landlord may welcome the retailer's lease rejection so it can get in a tenant paying higher rent, he said.

Rite Aid has assumed ownership of the store leases that it is auctioning through A&G. Rather than just close those stores or reject those leases, Rite Aid has determined that those locations have a value to some other users and it is worth selling them, Gielchinsky said.

“Why dump it [a store lease] if some buyer is willing to take it over from you and pay you a few bucks while they’re at it,” he said.

Even before the Chapter 11 filing, Rite Aid had closed 200 underperforming stores recently that accounted for "$80 million of dead rent," an attorney for the chain, Joshua Sussberg, said during a court hearing Oct. 16 in Trenton, New Jersey.

"So every single year the company is paying $80 million for space that is vacated, is not being utilized and is not generating cash," he said.

Rite Aid has studied and done a cost analysis of every one of its leases and has put its stores into three categories, according to Sussberg. Those are: underperformers with no path to profitability; locations in the middle in terms of performance; and those that are "absolutely" performing.

"We are going to use this Chapter 11 process to rationalize our footprint ... and give this company a capital structure and a footprint that can succeed," Sussberg said.

Rite Aid has received a commitment of $3.45 billion from some creditors and lenders to support its business operations and to financially restructure. But the company reported in a regulatory filing last week that it still faces significant challenges.

"Our operations and our ability to develop and execute our business plan are subject to significant risks and uncertainties associated with Chapter 11 cases." Rite Aid told the Securities and Exchange Commission. "These conditions raise substantial doubt about our ability to continue as a going concern. ... A weakening of our financial condition, cash flows and results of operations could adversely affect our ability to implement the plan (or any other plan of reorganization). If we are unable to consummate the plan, we may be forced to liquidate our assets."

During the 13 weeks ended Sept. 2, Rite Aid generated $5.65 billion in revenue and had a net loss of $1.02 billion, compared with $5.9 billion in sales and a net loss of $331.3 million in the year-earlier period, according to the filing.

Simultaneous to tying to restructure, Rite Aid has put itself or any part of its assets up for sale, a tack that Bed Bath & Beyond also took, unsuccessfully.

Given Rite Aid's challenges, the retailer couldn't avoid seeking bankruptcy protection, according to Gielchinsky.

“For a company its size it had a massive amount of debt, it was choking on debt," he said. "And with the lawsuits and then the debt and the competition that whole industry has faced from everyone in retail trying to have [a] pharmacy in the corner, it’s too much for Rite Aid to overcome.”