Rite Aid to buy Shore chain

Drug retail giant to pay undisclosed price for Edgehill's 25 stores

February 09, 1999|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Drugstore giant Rite Aid Corp. will expand on Maryland's Eastern Shore and double its presence in Delaware by acquiring Edgehill Drugs Inc., the largest drugstore chain on the Delmarva Peninsula, Rite Aid said yesterday.

The nation's third-largest drugstore operator, with more than $12 billion in annual sales, said it will add privately owned Edgehill's 25 stores to its empire.

Rite Aid did not disclose the purchase price. The company is scheduled to close the deal March 2 and expects the acquisition to add to earnings starting with the first quarter of fiscal year 2000.

Edgehill, which reported annual sales of $75 million last year, has nine stores on Maryland's Eastern Shore and 16 in the Dover, Del., area. The Georgetown, Del., firm was founded 43 years ago.

"The addition of this pre-eminent drugstore chain strengthens Rite Aid's presence in the Delmarva Peninsula," Martin L. Grass, chairman and chief executive officer, said in a statement yesterday.

Grass called the acquisition a natural complement to the chain's operations. Aside from the Edgehill outlets, Rite Aid now has 3,800 stores in 30 states, including 174 in Maryland and 17 in Delaware. The drugstore chain leads its rivals in the mid-Atlantic region, though nationally it ranks third in sales behind competitors Walgreen Co. and CVS Corp.

The Edgehill stores will carry the Rite Aid banner, and Rite Aid will retain all 250 Edgehill workers, the company said.

Allison Costello, a Rite Aid spokeswoman, said she did not know how many, if any, of the acquired locations would be transformed into Rite Aid's newer prototype. Rite Aid has been building or remodeling stores in a large, free-standing format, with wide aisles, drive-through pharmacies and an expanded assortment of nonperishable food and health and beauty items.

Walgreen recently announced that it would enter the Baltimore market. It is seeking approval to build its first three outlets -- on Eastern Avenue and North Avenue in Baltimore and on Liberty Road in Baltimore County.

Rite Aid stock closed yesterday at $46, down $1.50 per share.

Pub Date: 2/09/99

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