Rite Aide, GNC join in Web deal

Each is buying a stake in Drugstore.com Inc.

Cyberspace

June 23, 1999|By BLOOMBERG NEWS

CAMP HILL, Pa. -- Rite Aid Corp., the third-largest U.S. drugstore chain, and General Nutrition Cos., the No. 1 U.S. specialty-vitamin retailer, said yesterday that they will buy stakes in Drugstore.com Inc. as part of a 10-year agreement to sell their products on the World Wide Web.

Rite Aid agreed to invest $7.6 million for 25.3 percent of Drugstore.com, a closely held online retailer of health care products. General Nutrition will pay $2.4 million for 8 percent. Drugstore.com will have exclusive rights to Internet sales of GNC products and the Rite Aid/GNC PharmAssure brand of vitamins and supplements, to be introduced in the fall.

Rite Aid said it chose Drugstore.com because of its financial backing and marketing strategy. Drugstore.com is led by former Microsoft Corp. executive Peter Neupert and is financed by Microsoft co-founder Paul Allen, Starbucks Corp. Chairman Howard Schultz, online retailer Amazon.com Inc. and venture capital firm Kleiner Perkins Caufield & Byers.

The Web sites of Camp Hill, Pa.-based Rite Aid and Pittsburgh-based GNC will be linked to Drugstore.com's, allowing customers to order directly from the retailer.

Rite Aid and Bellevue, Wash.-based Drugstore.com also will combine advertising.

Pub Date: 6/23/99

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