Rite Aid Inc. took over 25 Eckerd stores in Maryland yesterday, including nine in the Baltimore region, shoring up its position as the second-largest drugstore chain in the state.
The Maryland stores are part of Rite Aid's $4 billion deal for the Brooks and Eckerd chains, which was announced in August and completed yesterday.
In all, Rite Aid bought 1,854 Brooks and Eckerd stores, and six distribution centers in 18 states, making it the largest drugstore chain on the East Coast, the company said.
The purchase was the first major acquisition since a new management team took control of the Camp Hill, Pa., company in 1999 as it was reeling from accounting and management turmoil. Former top executives were subsequently convicted of conspiracy and defrauding shareholders and jailed.
Rite Aid is selling one Maryland store, in Denton on the Eastern Shore, as part of a settlement with state antitrust regulators, leaving it with 158 stores statewide.
Customers will immediately be able to fill prescriptions in any store, though integration of the new stores will be done in phases, the company said.
"Within the next 30 days, there will be banners going up on all the stores saying `Rite Aid is coming,'" said Jody Cook, a Rite Aid spokeswoman. "Twenty-three pilot stores across the country will be converted immediately to make sure our conversion strategy and conversion processes are perfect."
The company said some stores are likely to close to eliminate overlap but that specific locations had not been identified.
"The whole idea of the acquisition is to expand and grow," Cook said. "We expect to close fewer than 200 stores, and that's out of 1,854 stores in 18 states. Where the stores are close, we'll evaluate both of the stores and, of course, keep the store open that offers the best shopping experience."
That acquisition gives Rite Aid more than 5,000 stores in 31 states and Washington, and strengthens the chain's position as the third-largest drugstore operation in the country, behind CVS and Walgreens. CVS, with 6,200 stores, has 170 stores in Maryland, including 50 in the Baltimore area, according to a company spokesman. Walgreen Co. has 34 Maryland stores, concentrated in the Baltimore region, among nearly 5,800 nationwide.
Rite Aid plans to spend more than $1 billion over the next few years to remodel most of its Brooks and Eckerd stores and distribution centers. The company also plans to open nearly 1,000 new or relocated stores over the next five years.
Among the more immediate changes that customers can expect in former Eckerd stores are about 8,000 new products, including more nonpharmacy items and the Rite Aid brand.
"It's very competitive," said Mark Millman, president and chief executive of Millman Search Group, a nationwide retail search and consulting firm that's based in Owings Mills. "The only way to get ahead is to gobble up your competition, put a location on every corner and be a market maker."
By expanding their offerings with food and other items, and, in some cases, adding walk-in clinics, drugstores are becoming general merchandisers with the pharmacy as the hook, Millman said.
"The small firms can't survive," he said. "They sell out."
Rite Aid has annual revenue of more than $27 billion, according to information provided by the company. Before the acquisition, Rite Aid's annual revenue was $17.5 billion and 3,332 stores in 27 states and Washington.
Shares of Rite Aid closed yesterday at $6.55, up 19 cents, on the New York Stock Exchange.
Rite Aid has acquired 25 Eckerd stores in Maryland, including the following nine in the Baltimore region:
Gambrills 2633 Brandermill Blvd.
Baltimore 6300 York Road
Timonium 23 W. Timonium Rd.
Aberdeen 15 West Bel Air Ave.
Bel Air 606 Hoagie Dr.
Bel Air 2444 Churchville Rd.
Bel Air 5 Bel Air South Pky. Suite E5
Belcamp 1321 Riverside Pky.
Havre de Grace 1003 Pulaski Hwy.