Eckerd Corporation

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Eckerd Corporation
FatePartially sold to CVS in 2004, Acquired by Rite Aid in 2007
Founded1898
Defunct2007
HeadquartersLargo, Florida
Warwick, Rhode Island
ProductsPharmacy, Cosmetics, Health and Beauty Aids, General Merchandise, Snacks, 1 Hour Photo
ParentRite Aid
WebsiteEckerd.com
 
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Eckerd Corporation
FatePartially sold to CVS in 2004, Acquired by Rite Aid in 2007
Founded1898
Defunct2007
HeadquartersLargo, Florida
Warwick, Rhode Island
ProductsPharmacy, Cosmetics, Health and Beauty Aids, General Merchandise, Snacks, 1 Hour Photo
ParentRite Aid
WebsiteEckerd.com

Eckerd Corporation was an American drug store chain that was headquartered in Largo, Florida,[1] and toward the end of its life, in Warwick, Rhode Island.[2]

The chain had approximately 2,800 stores in 23 states as far west as Arizona. In 2004 it was the fourth largest drug chain in the U.S. In April 2004, the company (then a subsidiary of J. C. Penney) was broken up in a $4.52 billion deal, with approximately 1269 stores in Florida, Louisiana and Texas, along with Eckerd's $1.3 billion mail order pharmacy, sold to CVS Corporation (now CVS Health).[3][4] The deal enabled CVS to leapfrog past rival Walgreens with some 5,400 stores.[4] Because CVS already owned 74 stores in Florida at the time, including 19 in the Tampa Bay Area, many duplicate locations were closed. The remaining stores were sold to the Quebec-based Jean Coutu Group and merged with its Brooks Pharmacy chain. The Eckerd name and corporate headquarters, which housed 1,000 administrative workers at the time in Largo, Florida would remain temporarily intact while under the Coutu ownership. The sale erased the chain's name among its 622 Florida stores, where it had been synonymous with the pharmacy business since Jack Eckerd bought three old drugstores in the Tampa Bay area in 1952.[5] Brooks Eckerd, Jean Coutu's U.S. operations would eventually be sold to Rite Aid. In return, a stake in Rite Aid was ceded to the French-Canadian company. The remaining Eckerd locations became Rite Aids.[6]

For CVS, Florida's older population is a crucial pharmacy marketplace in its ongoing competition with Walgreens. After a major building binge in the Sun Belt prior to 2004, Walgreens dislodged Eckerd as Florida's drugstore market share leader a few years prior to that. CVS needed Eckerd's real estate to mount a credible performance quickly.[5]

History[edit]

Eckerd was founded in September 1898 (making it the oldest of the "big four" drugstore chains), by 27-year-old J. Milton Eckerd and Z. Tatom in Erie, Pennsylvania. In the company's early years, it operated at 1105 State Street in downtown Erie as the Erie Cut-Rate Medicine Store. In 1912, Eckerd and Tatom sold their original store to Eckerd's sons and moved to Wilmington, Delaware, establishing a new store. From Delaware, the chain expanded to North Carolina and later Florida.[7] Jack Eckerd, son of the founder, was responsible for the expansion of the company when he acquired three stores in Florida in 1952.

In 1961, Eckerd changed from a proprietorship to a publicly owned company. At the height of Eckerd's success, it had over 2,800 stores in more than 20 states, including 1,600 stores with Eckerd Express Photo one-hour photo labs in 19 states, and revenue of $13.1 billion in fiscal year 2000.

Between 1968 and 1985, Eckerd owned Eckerd's Apparel and J. Byrons department stores. The latter was sold off in 1985.[8]

J.C. Penney and Jean Coutu[edit]

In 1996, J.C. Penney and Eckerd agreed to merge. Under the agreement, all of JCPenney's Thrift Drug unit of drug stores (comprising Thrift Drug, Kerr Drugs, Fay's Drugs, and some Rite Aid stores) were rebranded to the larger Eckerd name. This marked Eckerd's re-entry into the Pennsylvania market. Many Thrift Drug stores were remodeled to Eckerd's look, having their light fixtures replaced. In turn, JCPenney Catalog Centers, like Thrift Drug long had, were added to Eckerd stores.

Eckerd was owned by JCPenney from 1997 to 2004, and was one of the largest drug store chains in the U.S., with over 2,800 stores stretching from New York and Connecticut to Florida and west to Arizona. One carryover from the Thrift Drug days after the merger took over was the presence of JCPenney Catalog Centers inside certain locations, which enabled Eckerd customers to order merchandise from store catalogs and pick it up at an Eckerd location. The sales would end a long, grueling and secretive bid process that has hung over Eckerd for the preceding six months. JCPenney, which had seen its seven-year ownership of Eckerd as a distraction that would cost too much to continue fixing, in March 2004 formally declared that it would carry Eckerd on its books as a discontinued asset. Penney also took a $1.3-billion charge against earnings in connection with selling the drugstore chain that had been accounting for 45 percent of its annual revenues. Penney, which agreed to acquire Eckerd in November 1996 and closed on the deal in 1997, was likely to lose money on its investment. Penney paid $3.3-billion and assumed $1-billion in debt to acquire Eckerd and combine it with its 800-store Thrift Drug chain. But Penney also bought more than 500 more stores from four other chains in New York state, Virginia and the Carolinas to create what for a while was the nation's second-largest drugstore chain.[5]

In 1998, Eckerd acquired the 141-store Genovese chain in the New York metropolitan area,[9] and renamed the stores in 2003.[10]

In July 2004, J.C. Penney sold all of the Eckerd stores along the Eastern Seaboard from Georgia to Connecticut to Jean Coutu, and merged with Coutu's other American pharmacy chain, Brooks Pharmacy. The other stores, mainly in the Southeastern and Southwestern United States, were sold to CVS. Walgreens, however, did not expect to buy any of the stores CVS or Coutu sold. "We have always grown organically rather than buying somebody else's stores," said Walgreen Co. spokeswoman Carol Hively. (However, Walgreens did merge with the established Happy Harry chain, that already had 75 locations in Delaware, Pennsylvania, Maryland and New Jersey.) Walgreens, which had 4,200 stores in 44 states at the time, had been adding 450 a year and at the time planned to have 7,000 by 2010. While CVS had 696 stores in Florida before closing any duplicates with Eckerd, Walgreens had 613 stores and plans for 748 within three years.[5] Walgreens, however, did not expect to buy any of the stores CVS or Coutu sold. After the sale Eckerd continued to accept JCPenney charge cards and operate the Catalog Centers in certain locations.

CVS conversions[edit]

A CVS Pharmacy in Southside Place, Texas that was formerly an Eckerd

CVS bought more than 1,200 Eckerd stores and converted most of them to CVS Pharmacies in late 2004 and 2005, eliminating the Eckerd name from markets such as Florida, Texas, Oklahoma, Louisiana, and Mississippi, which had once been among the chain's strongholds. Even a few brand-new locations in Texas and Arizona were transformed into CVS almost as quickly as they were built as Eckerd stores.[citation needed] The CVS purchase also included the Eckerd stores located in Colorado; however, CVS opted to close these stores.[11]

Brooks Eckerd Pharmacy[edit]

Former Eckerd in Upstate New York that is a Rite Aid store today

Brooks Eckerd Pharmacy was created when Jean Coutu purchased Eckerd from J.C. Penney and merged it with Brooks. Eckerd's corporate headquarters was transferred from Florida to Rhode Island, the base of Brooks Pharmacy. The Eckerd and Brooks chains shared many of the same corporate functions. Jean Coutu operated the stores it purchased under the slightly modified "Eckerd Pharmacy" name and logo, featuring a red Eckerd capsule in an attempt to unify the Eckerd and Brooks chains.

Acquisition by Rite Aid[edit]

An Eckerd Pharmacy on August 4th, 2007 located in Rochester, Pennsylvania, built on the site of the childhood home of pop singer Christina Aguilera. The store officially converted to Rite Aid on August 31st, 2007.

On August 23, 2006, the Wall Street Journal announced that Rite Aid would acquire 1,858 Eckerd Pharmacy and Brooks Pharmacy stores from Jean Coutu for US$3.4 billion. The deal closed on June 4, 2007. Rite Aid announced that the two chains would be converted to the Rite Aid name, retiring the 109-year-old Eckerd banner. The merger was signed and completed as of June 4, 2007, with all remaining Eckerd stores converted to Rite Aid by the end of September 2007.

The conversion process consisted of two steps: new computer systems, and a full PPR (paint, powder, re-set) which consisted of new signage and a new design scheme. Many of the stores received new paint on their exteriors, making them look more like brick than the white stucco design of most Eckerd locations. Eckerd's remaining JCPenney Catalog Centers were closed in favor of Rite Aid choosing to accept JCPenney charge cards chainwide.

Slogans[edit]

See also[edit]

References[edit]

  1. ^ "Eckerd Offers You Advantages and Opportunities Unique in Our Industry!." Eckerd. February 3, 1997. Retrieved on June 19, 2010. "Eckerd Corporation 8333 Bryan Dairy Rd. Largo, Florida 34647"
  2. ^ "Contacting Us." Eckerd. Retrieved on June 19, 2010. "Mail: 50 Service Ave., Warwick, RI 02886."
  3. ^ "CVS Corporation to Acquire 1,260 Eckerd Stores and PBM/MAIL Order Pharmacy Business in $2.15 Billion Transaction | CVS Caremark". Info.cvscaremark.com. Retrieved 2012-06-13. 
  4. ^ a b "Business: Buyout of Eckerd is official". Sptimes.com. Retrieved 2012-06-13. 
  5. ^ a b c d "Business: Deal has 2 firms splitting Eckerd". Sptimes.com. Retrieved 2012-06-13. 
  6. ^ "Eckerd is now Rite Aid." Rite Aid. Retrieved on June 19, 2010.
  7. ^ Eric Ruth (2006-08-25). "Del. fixture Eckerd acquired". Delaware News-Journal. Retrieved 2006-08-26. [dead link]
  8. ^ http://www.fundinguniverse.com/company-histories/eckerd-corporation-history/
  9. ^ Terry Pristin (November 25, 1998). "J.C. Penney to Buy Genovese, Expanding Its Drugstore Chain". The New York Times. Retrieved December 23, 2009. 
  10. ^ Matt Donnelly (July 16, 2003). "Genovese Drug Stores Take on Eckerd Name". Newsday. Retrieved December 23, 2009. 
  11. ^ "Business: CVS backs out of Eckerd's Colorado expansion plans". Sptimes.com. 2004-04-12. Retrieved 2009-07-24. 

External links[edit]