Rite Aid Corp. yesterday continued the wheeling and dealing it began six months ago, announcing the sale of most of its Florida stores to Eckerd Corp. for $75 million in cash.
With the sale of 109 stores, Camp Hill, Pa.-based Rite Aid will also close its distribution center in Melbourne, Fla., but will continue operating 24 stores in northern Florida.
The deal is expected to be a financial wash for Rite Aid, the largest national drug retailer with more than 2,800 discount stores in 23 states and Washington, D.C. Cash from the sale will be offset by the cost of closing the distribution center and maintaining the leases on Florida properties not being acquired by Eckerd.
"There will be no gain or loss," said spokeswoman Amy Johnson.
Nevertheless, the deal made sense for Rite Aid, analysts said.
"They didn't have enough stores there to be a major player," said Terence J. McEvoy of Janney Montgomery Scott in New York. "They were making below-acceptable returns. . . . They had better places to go. The company's trying to become a more important factor in the industry by concentrating its efforts in the mid-Atlantic and Northeast."
Part of that push will take place in the Baltimore metropolitan area. For fiscal 1996, ending March 3, Rite Aid is scheduled to open seven new stores, relocate six others and expand 16, Ms. Johnson said. Of the company's 178 stores in Maryland, 115 are in the Baltimore market.
Prospects in Florida were less sanguine.
"South and Central Florida were marginally profitable areas for Rite Aid and the substantial future investment needed to grow in these markets can be better utilized in other geographic regions," Martin Grass, Rite Aid's chairman and chief executive, said in a statement.
In other actions since January, Rite Aid announced:
* The acquisition on June 21 of 30 drugstores in the New York metropolitan area from Woodbridge, N.J.-based Pathmark Stores Inc. for an undisclosed sum.
* The sale on May 15 of ADAP Inc., a specialty retailer of automotive parts and accessories, for about $66 million.
* The promotion on Feb. 16 of Martin Grass to chairman and chief executive, succeeding his father and company founder Alex Grass.
* The completion of its acquisition of most of Pontiac, Mich.-based Perry Drug Stores Inc. for about $132 million.
Earlier this week, Harrisburg, Pa., wholesale food supplier Super Rite Corp., of which Alex Grass is chairman and Martin Grass is treasurer, announced its sale to Richmond, Va.-based Richfood Holdings Inc. for $320 million.
Yesterday's deal, however, was not related. Subject to regulatory approval, the acquisition will bolster Eckerd's No. 1 position in Florida. The Largo, Fla.-based company plans to operate 37 of the Rite Aid stores as Eckerd stores and buy the fixtures, inventory and prescription files of the other 72 stores.
Eckerd, which already runs 550 stores in Florida, operates 1,689 stores in 13 states.
Eckerd, which plans to sell 2.5 million new shares to the public to help raise money for the Rite Aid acquisition, posted $4.55 billion in sales last year.
The acquired stores had contributed $190 million to Rite Aid sales last fiscal year, and about 3 cents to earnings per share. Rite Aid earned $141.3 million, or $1.67 per share, on sales of $4.53 billion last fiscal year. On June 19, the company reported that earnings for the first quarter, ended June 3, increased six cents to 46 cents over the same period last year.
Rite Aid stock closed yesterday at $26 per share, up 75 cents.