Rite Aid passes off more stores to Walgreens
Rite Aid Corp. moved to transfer more of its store locations to Walgreens Boots Alliance as part of a $4.4 billion deal between the two retail pharmacy giants.
Rite Aid, headquartered in East Pennsboro Township, has transferred 625 stores under the terms of the deal announced last September. The company began transferring stores in November and expects to have transferred all 1,932 stores by this spring. Rite Aid will retain 2,569 stores in 19 states once the deal is finished.
Thus far, Rite Aid has received $1.3 billion in the deal, funds the company said will be used to pay off $970 million in outstanding secured loans.
"Going forward, we remain focused on the continued smooth execution of that process and capitalizing on our most significant business-building opportunities as we work together to deliver a great experience to our customers and patients, and drive value for our shareholders," said chairman and CEO of Rite Aid John Standley in a statement.
Once the transfer of all locations involved in the deal is complete, Walgreens is expected to close 600 of the locations. The decision was revealed in an earnings report by Walgreens, which expects to begin closing stores when the full transfer is complete. The company did not announce which stores will be closed.
Rite Aid reported $5.4 billion in revenue in its fiscal third quarter, which ended Dec. 2 of last year, down from $5.7 billion in revenue from the same quarter in 2016.