Report: Walmart may be eyeing Rite Aid

Speculation around possible sale brushed off by drug store chain

NEW YORK — Rumors have been circulating that Walmart may be out to buy Rite Aid, though nothing has been confirmed yet, according to published reports.

Crain’s New York Business reported Sunday that the rumors surfaced because many thought the idea would make sense, considering Walmart’s ambitions to enter the New York market have been dashed by local labor unions, while Rite Aid continues to have issues with debt and store closings. A purchase of Rite Aid, analysts said, would boost Walmart’s sales — which have been in decline lately  — and give it a huge presence in the city, where the retail pharmacy chain operates nearly 200 stores.

But in addition to not talking to Crain’s, Rite Aid didn’t comment to Drug Store News about the rumors either because, at least for the time being, that’s just what they are: rumors.

And whatever the future holds, Rite Aid’s moves as of late don’t suggest it’s looking to sell itself. While many — including an analyst quoted in the Crain’s article — have suggested that the chain sell off its West Coast stores, it has consistently refused to do so. It recently converted one West Coast store, in Newport Beach, Calif., to its new Wellness store format, which is part of the chain’s broader effort to pursue organic growth; that effort includes plans to remodel about 500 stores during fiscal year 2012.

While all the Wellness stores except the Newport Beach one are on the East Coast, the fact that it has one in California indicates that it’s looking to improve its West Coast business rather than let go of it.

Comments

- 5:01 PM
afein@pembrokeconsulting.com says

Anything is possible, I suppose, but I didn't see a single credible fact in the Crain's article. Read it for yourself here: http://www.crainsnewyork.com/article/20110717/SUB/110719927 (Hey, DBN, why not publish the original link?) Just my $0.02, but Rite-Aid is not in danger of going bankrupt because of last summer's debt restructuring. See Rite-Aid Postpones Judgment Day (Again) Adam

- 12:07 AM
al.godley@gmail.com says

Adam, I agree. But it would sure give Walmart a significant advantage in a number of areas. Clearly the inner city markets as well as extended coverage to offer employers with a direct relationship. Not to mention the opportunity to continue the development of the small store format.

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