Definitions

Rite_Aid

Rite Aid

Rite Aid is an American retailer and pharmacy chain, operating over 5,000 stores in 31 states and the District of Columbia. Rite Aid is the largest drugstore chain on the East Coast and the third largest drugstore chain in the U.S. The company is publicly traded on the New York Stock Exchange under the ticker RAD. Rite Aid began in 1962 as a single store opened in Scranton, Pennsylvania called Thrif D Discount Center. After several years of growth, Rite Aid adopted its current name and debuted as a public company in 1968. Rite Aid is headquartered in Camp Hill, a suburb of Harrisburg, Pennsylvania.

Rite Aid reported total sales of USD $24.3 billion in Fiscal Year 2008.As of 2008, its market capitalization has dropped to under $1 billion. Rite Aid is a Fortune 500 company.

Its major competitors include CVS and Walgreens.

History

Alexander Grass founded the Rite Aid chain in Scranton, Pennsylvania, as Thrif D Discount Center. The first store opened in September 1962. Through acquisitions and new stores, Rite Aid quickly expanded into 5 northeast states by 1965. The chain was officially named Rite Aid Corporation in 1968 and made its debut on the American Stock Exchange. It moved to the New York Stock Exchange in 1970.

Growth and acquisitions

Just ten years after its first store opened, Rite Aid operated 267 locations in 10 states. It was named the third largest drugstore in the United States by 1981; shortly thereafter, 1983 marked a sales milestone of $1 billion. A 420-store acquisition along the east coast expanded Rite Aid's holdings beyond 2,000 locations. Among the companies acquired was Baltimore, Maryland's Read's Drug Store.

Rite Aid acquired twenty-four Hooks Drug stores from Revco in 1994, selling nine of those stores to Perry Drug Stores, a Michigan-based pharmacy chain. One year later, the 224-store Perry chain itself was acquired by Rite Aid. The 1,000-store West Coast chain Thrifty PayLess was later acquired in 1996. The acquisition of Thrifty PayLess included the Northwest-based Bi-Mart membership discount stores, which was sold off in 1998. Acquisitions of Harco, Inc. and K & B Inc. brought Rite Aid into the Gulf Coast area.

Partnership with GNC

General Nutrition Companies (GNC) and Rite Aid formed a partnership in January 1999, bringing GNC mini-stores within the Rite Aid pharmacies. A partnership with drugstore.com in June 1999 allowed customers of Rite Aid to place medical prescription orders online for same-day, in-store pickup.

Company troubles

In the fall of 1999, Rite Aid was the subject of several media reports about its aggressive marketing of pharmaceutical products and other consumer-unfriendly practices, including selling date-sensitive products well past the due dates. Rite-Aid is the largest pharmacy chain in California. It has recently been investigated by government regulators in California, Washington, and Oregon. Consumer Complaints Regarding Rite Aid Pharmacy

Rite Aid also had a major accounting scandal that led to the departure (and subsequent jail time) of several top ranking executives, including the CEO, Martin Grass, son of company founder Alexander Grass. At the time, Rite Aid had just acquired Thrifty Payless Drug and was integrating those into the company. As a result, Leonard Green, who ran the investment firm that had sold those stores to Rite Aid took control of the company and placed Mary Sammons from Fred Meyer in as CEO. Sammons instituted a number of reforms of Rite Aid's business and has returned the company to credibility and profitability.

July 2001, Rite Aid agreed to improve their pharmacy complaint process by implementing a new program to respond to consumer complaints.

July 25, 2004, "Rite Aid to pay $7 Million for Allegedly Submitting False Prescription Claims to Government" Department of Justice Press Release

August, 2007. Rite Aid acquired approximately 1,850 Brooks/Eckerd Stores throughout the United States in hopes to improve their accessibility to a wider range of consumers. The following fiscal quarter saw an increase in revenue but a sharp fall in net income as Rite Aid began the integration process. Rite Aid shares fell over 75% between September 2007 and September 2008, closing at a low of $0.98 on September 11, 2008.

Living More

Beginning in March 2005, Rite Aid introduced Living More, a seniors' loyalty program; offering 10% off of prescription drugs purchased with cash, generic products, as well as other items. Additional benefits also include discounts on certain days of the week, as well as unadvertised sales on merchandise. This program is very similar to the former Revco program which was called "Senior Shoppers"; Rite Aid attempted to purchase Revco in 1996. This might be attributed to the fact that Revco's former Vice President of Marketing, James Mastrian, now holds the same position at Rite Aid.

Merger with Eckerd and Brooks

On August 23, 2006, the Wall Street Journal announced that Rite Aid would be buying the Eckerd Pharmacy and Brooks Pharmacy chains (Brooks Eckerd Pharmacy) from the Quebec-based Jean Coutu Group for US$3.4 billion, and merging the two chains into one dominant pharmacy system. The company's shareholders overwhelmingly approved the merger on January 18, 2007. After some store closures and the conversion of the two chains to Rite Aid is complete, the deal will make Rite Aid the dominating drug store retailer in the Eastern U.S., and secures its place as the third largest drug retailer nationwide (behind the faster growing Walgreens and CVS chains).

Similar to what CVS has gone through in Chicagoland after its purchase of Albertson's drug store chains, the deal had left Rite Aid with some locations in close proximity to each other. (Only 23 store locations nationally were sold off to Walgreens, The Medicine Shoppe, or independent owners in order to meet federal regulations.) In many situations, especially Pennsylvania where both chains were dominant and had roots in those states (Rite Aid originated in Scranton, while Eckerd has roots in Western Pennsylvania via Erie for itself and Pittsburgh for converted Thrift Drug locations), there were now two Rite Aids as close as right next door to each other. However, in March 2008 some of these overlapping stores were closed, with the locations saying that they "moved" to a new address, when in fact they "moved" to the other Rite Aid that was nearby. Most of these stores that closed were pre-existing Rite Aid's before the Eckerd deal, since Eckerd had built newer, more modern locations with drive-thru pharmacies and larger space under ownership of both J. C. Penney and Jean Coutu Group, and the "moved to" site were converted Eckerd's. Employees at the closed stores were transferred to the nearby locations, so no layoffs were necessary.

Rite Aid had sold some locations to J. C. Penney's Thrift Drug chain in the mid-1990s shortly before J.C. Penney's acquisition of Eckerd, and had also sold all of their Massachusetts stores to Brooks in 1995, bringing some existing Eckerd and Brooks stores that were once Rite Aids full circle.

Because Eckerd was previously owned by J.C. Penney, Eckerd stores accepted J.C. Penney charge cards. Since the merger, all Rite Aids accept J.C. Penney charge cards.

On December 21, 2007, The New York Times reported that Rite Aid had record breaking losses this year, despite the acquisition of the Brooks and Eckerd chains.

Exits the Las Vegas market

On January 4, 2008, Rite Aid Corporation announced that it will terminate its operation of the 28 Rite Aid stores in the Las Vegas, Nevada area and has signed an agreement to sell patient prescription files of the 27 stores in the Las Vegas metro market to Walgreens. Terms of the transaction were not disclosed.

Rite Aid said it is in the process of also selling the prescription files of the one store it operates in Mesquite, Nevada and will also close that store.

Rite Aid said it will continue to operate its remaining store in Nevada in Gardnerville, which is close to the border of California where Rite Aid has more than 600 stores. Rite Aid said Las Vegas was a non-core market for the company that has not been contributing to overall results. The company hasn't opened a new store in the Las Vegas area since 1999.

Transfer of the prescription files to nearby Walgreens will take place over the next week, and customers whose prescriptions are being transferred will be notified by letter as well as signage in the stores. Rite Aid said it would work closely with Walgreens to make sure the transfer of all the prescriptions goes smoothly so as not to disrupt serving patients.

Rite Aid said it was working with interested parties on selling or assigning the leases on the 28 buildings. The company said it will close the stores, which are located in Las Vegas, North Las Vegas, Henderson and Mesquite, over the next three months as it sells or liquidates non-prescription merchandise.

Online

The domain riteaid.com attracted at least 14 million visitors annually by 2008 according to a Compete.com survey.

Notes

External links

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