Rite Aid

Rite Aid is growing, but will its stock keep on growing? - R.C., via the Internet Rite Aid Corp., the nation's third-largest drugstore chain behind Walgreen Co. and CVS Corp., is in a growth spurt. Already operating about 3,300 drugstores in 27 states and the District of Columbia, it intends to purchase 1,858 drugstores under the Brooks and Eckerd names, along with six distribution centers. These are being acquired from Canada's Jean Coutu Group Inc. in a deal announced at roughly $3.4 billion in cash and stock.

Rite Aid Corp., the problem-plagued drugstore chain, is expecting the U.S. Securities and Exchange Commission to launch an investigation into accounting practices that are forcing the company to revise its financial statements and slash past profit by $500 million, a company official said yesterday.Rite Aid has been contacted by the SEC's enforcement division, said Karen Rugen, Rite Aid's senior vice president of communications."There is no formal investigation right now," she said. "But given the size of the restatement -- approximately $500 million -- one can be anticipated."

The owners of a Mount Airy shopping center want a Carroll County judge to order a current tenant, Rite Aid of Maryland Inc., to accept a new Wal-Mart there.Apparently, the Mount Airy Wal-Mart isn't the sure thing town planners and opponents thought it was.A provision in the drugstore's January 1972 lease -- when the Rite Aid was a Drug Fair -- states that the shopping center owners cannot lease space to or permit a competing business within a two-mile radius, according to the lawsuit filed this week.

Rite Aid Corp. said yesterday that it expects a $67.9 million second-quarter loss, which the drugstore retailer blamed on store closings and relocations and on rising interest costs stemming from its January acquisition of PCS Health Systems Inc.In preliminary, unaudited financial results for the quarter that ended Aug. 28, the company said it lost 26 cents per fully diluted share.The loss reflects pre-tax charges of about $34 million related to the costs of closing or relocating 106 stores during the quarter, Rite Aid said.

One day after the abrupt resignation of Rite Aid Corp. Chairman Martin L. Grass and the company's disclosure that it had inflated profits by $500 million over three years, industry experts said Grass' departure was necessary to gain the confidence of investors."

The Mount Airy Planning and Zoning Committee unanimously approved a site plan last night for an 11,068-square-foot Rite Aid drugstore. The freestanding building with a drive-up pharmacy would replace a smaller store in the Mount Airy Shopping center.The five-member panel met with engineers from Linthicum-based BL Companies for 90 minutes before the vote, discussing entrances and exits for the proposed store facing Ridge- ville Boulevard along Route 27 and Ridgeside Drive."It's the most dangerous intersection we've got," said Keith Gehle, committee chairman.

Rite Aid Corp. of Camp Hill, Pa., said yesterday it restated earnings for fiscal year 1999 and two prior years after federal regulators reviewed the third-largest U.S. drugstore chain's accounting practices related to a spate of acquisitions. Fiscal 1999 earnings were lowered by 9 percent, 1998 earnings were cut by 3.3 percent and 1997 earnings were raised slightly.The review by the Securities and Exchange Commission -- which began after Rite Aid filed documents with the agency in December for a $650 million debt offering -- sparked the restated earnings for 1997 and 1998.

Shares of Rite Aid Corp. tumbled 39 percent yesterday after the third-largest U.S. drugstore chain said in a preliminary estimate that it expects fourth-quarter earnings to fall far short of analysts' estimates.Rite Aid shares plummeted $14.4375 to close at $22.5625, after the Camp Hill, Pa.-based company warned that higher-than-expected costs of expansion will likely result in earnings of 30 cents to 32 cents per share. First Call analysts had estimated earnings of 52 cents per share.The company's fourth quarter ended Feb. 27. Rite Aid said it will report its official earnings numbers March 29.The weak earnings will come from greater-than-expected expenses from opening and closing stores, and delays in moving from an old distribution center in Pennsylvania to a new one in Perryman, Rite Aid said.

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 Corp. said yesterday that it will consider offers to purchase all or part of PCS Health Systems Inc., its wholly owned pharmacy-benefits-management subsidiary.The Camp Hill, Pa.-based drugstore chain made the announcement yesterday after its board of directors authorized management to entertain offers for PCS."Rite Aid will evaluate an outright sale of PCS or a strategic investment in PCS," the company said in a statement.The possibility of a sale took one analyst who follows the company by surprise.

ALEX GRASS, 82 Founder of Rite Aid Rite Aid Corp. founder Alex Grass died Thursday night in Harrisburg, Pa., after a 10-year battle with lung cancer, saaid his daughter, Elizabeth Weese. She, along with her husband Brian D. Weese, were the owners of four Bibelot bookstores in Baltimore (in Timonium, Woodholme, Cross Keys and Canton) from April 1995 until they declared bankruptcy in March 2001. Mr. Grass helped build Rite Aid into one of the nation's largest drugstore chains and was a philanthropist who gave to civic, health and educational organizations.

U.S. mortgage rates again at record low WASHINGTON: Rates on 30-year mortgages fell to the lowest level on record for the second consecutive week after the Federal Reserve launched a new effort to assist the staggering U.S. housing market. Mortgage finance giant Freddie Mac said Thursday that average rates on 30-year, fixed-rate mortgages dropped to 4.78 percent this week, from 4.85 percent last week. It was the lowest in the history of Freddie Mac's survey, which dates back to 1971. Rates are down by more than a full percentage point from a year ago. "Mortgage rates followed other interest rates lower this week amid reports of slower economic growth," Frank Nothaft, Freddie Mac vice president and chief economist, said in a prepared statement.

Third-quarter earnings up 21% at McCormick Spicemaker McCormick & Co. said yesterday that third-quarter earnings per share increased 21 percent as the company raised prices and saw a small benefit from the sale of its Season-All business. The Sparks-based company reported net income of $68.6 million, or 52 cents per share, for the quarter ended Aug. 31. That was compared with $56.8 million, or 44 cents per share, for the corresponding period a year ago. Sales were $781.6 million, compared with $716.

Trial of 6 teens charged in bus attack gets under way The trial of six of the nine middle school students charged in the December attack of a woman and her boyfriend on a city bus began yesterday in juvenile court with attorneys arguing whether statements the teenagers made to police are admissible. The defense lawyers want to exclude from the adjudicatory hearing -- the equivalent of a trial in juvenile court -- statements the young suspects made to Maryland Transit Administration Police on the day of the beating.

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.

Arrest made quickly after store shooting The 31-year-old West Baltimore man who was shot outside a drugstore in the Mid-Town Belvedere neighborhood Monday night was in critical but stable condition at Maryland Shock Trauma Center yesterday, police said. Donta Madison was shot in the back, a hand and an arm while on the parking lot of the Rite Aid in the 200 block of W. Chase St., near Martin Luther King Boulevard, about 10:30 p.m., according to police. Three men were arrested about a block away in the 1200 block of Cathedral St., and one, a 26-year-old West Baltimore man, was charged with attempted murder.

Rite Aid is growing, but will its stock keep on growing? - R.C., via the Internet Rite Aid Corp., the nation's third-largest drugstore chain behind Walgreen Co. and CVS Corp., is in a growth spurt. Already operating about 3,300 drugstores in 27 states and the District of Columbia, it intends to purchase 1,858 drugstores under the Brooks and Eckerd names, along with six distribution centers. These are being acquired from Canada's Jean Coutu Group Inc. in a deal announced at roughly $3.4 billion in cash and stock.

In the Region Development group wins lease to run Inner Harbor Marina A development group that includes Harbor Bank executive Joseph Haskins Jr. has received a lease to operate the Inner Harbor Marina off Key Highway in South Baltimore. Under a deal approved by the Board of Estimates yesterday, Marine Associates LLC will pay the city $199,992 annually to rent the 158-slip marina. The lease has a three-year renewal option and is about $160,000 a year more than the lease with the previous operator, said Andrew B. Frank, executive vice president of the Baltimore Development Corp.

A mother who says she watched helplessly as a plainclothes security guard at a Rite Aid in Hampden scooped up her 10-year-old son and held him upside down is suing the guard and the corporation for $6 million. In the lawsuit, filed this week in Baltimore City Circuit Court, Tracy Martin claims that the guard, Walter Jackson, then dragged her son back into the store and searched his pockets as the boy screamed and cried. Jody Cook, a spokeswoman for Pennsylvania-based Rite Aid Corp., said she hadn't seen the lawsuit and declined to comment.

HARRISBURG - Franklin C. Brown, a former Rite Aid Corp. chief counsel convicted of accounting fraud, was sentenced to 10 years in prison yesterday by a judge who rejected his arguments that the term would be a death sentence because he is 76 and ill. Brown was convicted last October of conspiring to inflate earnings at Rite Aid, the No. 3 U.S. drugstore chain, witness tampering and obstructing justice. Before the trial, he signed a plea agreement that would have brought him a much lighter sentence, but changed his mind and gambled on an acquittal at trial.