Magazine article Drug Topics
Rite Aid Buys out LaVerdiere's Super D.S
Consolidation continues in the drugstore industry. In the latest move, Rite Aid Corp. has entered into a definitive agreement to buy LaVerdiere's Super Drug Stores. LaVerdiere's, Waterville, Maine, operates 67 drugstores in Maine, New Hampshire, and Vermont.
Asked about the acquisition, Rite Aid chairman and CEO Alex Grass said, "It's a natural extension for us. We're doing business in the northern portion of New England. It will enable us to provide better coverage, primarily in the state of Maine, as far as prescription business is concerned."
Rite Aid, based in Camp Hill, Pa., currently operates 2,691 stores in 23 Eastern states (this figure does not include the LaVerdiere purchase). At present, Rite Aid has 61 stores of its own in the same three states in which LaVerdiere operates. Revenues at Rite Aid reached $4.1 billion at the close of the fiscal year ending Feb. 26.
Why the sale? On the other side of the acquisition is Stephen LaVerdiere, president and CEO, who indicated that several factors had precipitated the move.
He pointed to the repeal of Maine's Sunday blue law about five years ago as one step that made it hard for LaVerdiere's to compete effectively. "Our stores were specifically designed to be 5,000 sq. ft. so that we would be able to remain open on Sunday. Any store larger than that was not permitted to stay open on Sunday. In that way, we were able to bring in business seven days a week. When that law was repealed, we found ourselves competing on Sunday with mass-merchandisers as well as big supermarkets," he said.
Furthermore, the repeal of the Sunday blue law made Maine an attractive place for Wal-Mart to be, he explained. As a result, Wal-mart opened 14 stores in the state over the past year and a half, with several more to follow, said LaVerdiere.
Rite Aid's purchase of Wellby Super Drug Stores from Hannaford Bros. Co. a couple of years ago also helped to heat up the competitive atmosphere in the markets in which LaVerdiere's operates. "We found ourselves competing with some very big national chains," said LaVerdiere.
Other influences in the decision were the weak economy in the Northeast, two military base closings, and a fairly serious pharmacist shortage. …