Walgreens Purchases 31 Drug Fair Stores
Drugstore retailer Walgreen Co. has completed the purchase of 31 New Jersey stores from drugstore retailer Drug Fair Group. In March, Walgreens announced it would will purchase the substantial assets of 32 stores from Drug Fair, who filed for Chapter 11 bankruptcy on March 18, 2009.
The purchase follows Walgreens’ previous purchase of prescription files from 11 Drug Fair locations in New Jersey. Prescription patients at those Drug Fair stores obtained access to their prescription histories at all Walgreens locations. Walgreens has since purchased the prescription files of two other Drug Fair locations and intends to purchase two more Drug Fair stores in the coming weeks. This represents the substantial portion of Drug Fair’s business and the retailer will not remain in operation.
During the next few weeks, the Drug Fair stores will be re-merchandised and refreshed as Walgreens locations, incorporating new signage and displays as well as exclusive products including the private label Walgreens brand. The hours of operation will remain unchanged throughout the renovations. Walgreens says many existing Drug Fair store employees will keep their jobs.
In February 2009, Walgreens agreed to purchase seven Rite Aid locations in San Francisco, CA and five Rite Aid locations in eastern Idaho. Walgreens, which already has 59 stores in San Francisco and 28 in Idaho, said it would combine some of the newly purchased locations with its own stores, but did not specify how many or which stores would close.
In December 2008, Walgreens announced it would slow down the pace of planned store openings during the next few years following a 10.4% decline in quarterly profits, but said it would continue opening new stores that offered the greatest rates of return. Walgreens reported a 1.9% drop in same-store sales during February 2009, but reported same-store sales increases in December 2008 and January 2009.
Walgreens reported fiscal 2008 sales of $59 billion and operates 6,679 drugstores in 49 states, the District of Columbia and Puerto Rico. Drug Fair is a privately-held company operating 33 stores in New Jersey. Terms of the purchase were not made public.