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Rite Aid leaves Camp Hill, opens Philadelphia headquarters

Rite Aid unveiled its new headquarters Wednesday in Philadelphia’s Navy Yard district, moving from its longtime home in Camp Hill.

On the second floor of 1200 Intrepid Ave., the Rite Aid Collaboration Center will bring Rite Aid’s remote corporate workforce and associates together in a modern space with state-of-the-art amenities.

The new headquarters, accessible to major transportation, offers employees across Rite Aid’s various businesses – including its retail pharmacy; Elixir; Health Dialog; and Bartell Drugs – the space to meet clients and to work collectively.

“This new collaboration space represents how we are modernizing our brand from the inside out,” Rite Aid President and CEO Heyward Donigan said in a release. “We are not only transforming our business to better serve our customers, but we are embracing new ways of working that (blend) a remote-first corporate workforce with opportunities for in-person collaboration.”

He added: “We are proud to join the Philadelphia community and continue our rich history in Pennsylvania as we work to improve health outcomes for our customers and communities.”

Designed by Wynnewood-based Meyer Design, the 23,000 square-foot Collaboration Center features conference rooms equipped with digital Neat Boards for video conferencing, a digital/video studio, and a Genius Bar to support IT needs. It also includes a catering kitchen, food and beverage stations, a business center, and a respite room for nursing, prayer and meditation. Rite Aid has signed a long-term lease with Ensemble Real Estate Solutions for the space, which can accommodate up to 300 employees.

Currently, Rite Aid has 2,350 stores in 17 states and a workforce of 50,000 plus, more than 6,300 of whom are pharmacists.

The company announced it was relocating its headquarters last September, and in April rejected a buyout offer from a New Orleans-based private equity firm.

Paula Wolf is a freelance writer

Rite Aid Healthy Futures distributes $3M in grants to kids’ hospitals

Rite Aid Healthy Futures announced Thursday that it has provided $3 million in grant funding to 34 children’s hospitals in 15 states, including one in central Pennsylvania, through its Connecting Communities initiative.

The goal is to expand equitable care and improve health outcomes for children in underserved and vulnerable neighborhoods. Programs being funded concentrate on screening for food insecurity; food distribution and nutrition education; and trying to eliminate systemic obstacles that prevent communities from achieving health and wellness.

Penn State Health Children’s Hospital in Hershey will receive $500,000, the largest grant, to support Harrisburg-area initiatives.

The money will be used to help overcome food insecurity among pediatric patient families; establish community gardens; increase year-round access to fresh produce; and teach school students how to grow healthy food. The grant will also support emergency food box distribution and a Veggie Rx program helping physicians connect patients with chronic and diet-related illness to healthy food.

“Expanding equitable care doesn’t start in the emergency room. It starts in our neighborhoods,” Matt DeCamara, executive director of Rite Aid Healthy Futures, an affiliate of Camp Hill-based Rite Aid, said in a release. “… Children’s hospitals already play a critical role delivering vital medical care, and many of these institutions have developed impactful programs to serve kids, families and communities in ways that extend beyond traditional medical care.”

All grants are funded through Rite Aid’s KidCents program.

Rite Aid declines $815m buyout offer 

East Pennsboro Township-based Rite Aid confirmed on Thursday that it rejected a buyout offer from a New Orleans-based private equity firm. 

The confirmation follows an article published by the New York Post this week reporting that private equity firm Spear Point Capital Management offered to buy Rite Aid last month for $14.60 a share, or $815 million. 

The non-binding, off-market proposal included the acquisition of all outstanding shares of Rite Aid’s common stock. The proposal provided no evidence of financing, required multiple months of exclusivity and called for Rite Aid to spend months soliciting competing offers, Rite Aid wrote in a release on Thursday. 

Spear Point co-founder Ron Bienvenu was not available for comment at the time of posting.  

According to the New York Post, Spear Point has found a buyer interested in purchasing Rite Aid’s pharmacy benefits manager, Elixir, for $2 billion. The company also believes that Rite Aid could make more money by selling its data to other businesses. 

“The company and its board of directors reviewed the proposal with the assistance of its financial and legal advisors, and the board concluded that the proposal was not credible and did not warrant further exploration,” Rite Aid said in its statement. 

Rite Aid reported its fourth quarter and full year results last week. In it, the national pharmacy chain reported a net loss from continuing operations of $389.1 million or $7.18 loss per share in the 13 week period ending on Feb. 26, 2022—an increase from $18 million from the last quarter last year. 

“The increase in net loss is due primarily to a current year charge of $229.0 million for the impairment of goodwill related to the Pharmacy Services Segment,” Rite Aid wrote in the report. 

Net loss from continuing operations for the fiscal year ended Feb. 26, 2022, was $538.5 million, or $9.96 loss per share, compared to last year’s net loss of $100.1 million, or $1.87 loss per share. 

Rite Aid added that the increase in net loss for both the fourth quarter and the year was partly due to drivers such as: included higher facility exit and impairment charges driven by company store closures, a gain on sale of assets in the prior fourth quarter and a gain on the acquisition of Bartell Drugs in the prior year’s fourth quarter. 

Rite Aid sued over use of new logo font 

Rite Aid updated its branding in 2020. The font used in the new logo is now embroiled in a recent lawsuit. PHOTO/PROVIDED

A Delaware-based type foundry and design studio has filed a suit against Rite Aid and its creative and advertising agencies, alleging that the Camp Hill pharmaceutical chain violated a license agreement with the company when it used one of its fonts as part of a $700 million rebranding campaign. 

Brand Design Co., doing business as House Industries, alleges in the suit that Rite Aid, along with its creative and advertising agencies PureRED Creative and Burns Group, used a font licensed to them by House Industries in Rite Aid’s new logo when the licensing agreement expressly prohibited use of the font in a logo. 

Rite Aid unveiled a brand refresh in May 2020 featuring the new logo. The new design featured a change from its former red coloring to a blue and green color scheme and the lettering was changed to House’s Neutraface font. 

In the complaint filed in the U.S. District Court Eastern District of Pennsylvania, House wrote that it avoids licensing its fonts in ways that would allow them to be exclusively associated with a single license. 

“House’s font designs are intended to evoke a mood or an aesthetic that anyone can license; its designs are not intended and are not licensed to evoke an exclusive association with any one company,” House wrote in the complaint. 

House alleges that all agreements between it and either Rite Aid or its agencies prohibit the use of Neutraface in a logo and both Rite Aid and PureRED signed the same license agreements containing the same logo prohibitions. 

Rite Aid has gone on to use the new logo across its store brand product packaging and has updated its store fronts with the new logo. Use of the Neutraface font in this way has decreased the licensable value of the font, according to House. 

“Not only did Rite Aid take for its own what House does not license, it also fundamentally undermined the licensable value of Neutraface,” the company wrote in the complaint. “This harm is magnified by the incredibly broad scope of Rite Aid’s unauthorized uses. By using Neutraface so extensively as its own brand, Rite Aid threatens to destroy the present and future licensable value of the font.” 

The Neutraface font is one of House’s proprietary fonts that it licenses to clients for limited use. Companies that purchase a license for the font can access it using a font generating software that they download. 

The font software’s value comes in House’s ability to license it repeatedly to different licensees over an extended period, which it has done with Neutraface since 2002. 

The complaint states that upon learning of Rite Aid’s use of Neutraface outside of its licenses, the company has made numerous attempts to work with PureRED and Rite Aid to reach a resolution, but after failing to come to an agreement, Rite Aid eventually stopped responding. 

In a statement regarding the suit, Andy Cruz, founder of House Industries, said that Rite Aid’s failure to respond forced the company’s hand. 

“As we detailed in our complaint, Rite Aid and its agents have misappropriated our company’s intellectual property and filed a trademark for their company logo without our approval as part of a complete brand makeover,” said Cruz. “We are a small company, and have attempted to resolve this matter amicably, without resorting to litigation against a much larger corporation, but Rite Aid’s actions have forced us to take appropriate steps to protect our company’s artwork and rights. We look forward to establishing our claims in court.” 

Rite Aid was not immediately available for comment. 

Rite Aid Healthy Futures to donate $10 million to nonprofits

Rite Aid Healthy Futures, the charity formerly known as The Rite Aid Foundation, announced a $10 million Strengthening Cities initiative to support healthier and more equitable neighborhoods.

Initially, it will fund 20 nonprofit organizations, with emphasis on Black and Brown-led charities, in Baltimore, Buffalo, Cleveland, Detroit, Fresno and Philadelphia. Community gardens, urban farms, school partnerships and hunger-relief efforts will be among the beneficiaries.

Rite Aid Healthy Futures identified the six focus cities by mapping demographic and health-related data in locations where Rite Aid stores have a significant presence.

The grants will support innovative and sustainable programs that expand food access, advance food sovereignty, address food apartheid and improve health outcomes for children and their families, according to a release.

“Racial inequities and health disparities across big cities and small towns in the U.S. continue to profoundly affect the lives and futures of tens of millions of Americans every day,” Matt DeCamara, executive director of Rite Aid Healthy Futures, said.

“ZIP codes have unparalleled consequences for one’s life opportunities and long-term outlook. The Strengthening Cities initiative will confront the harsh realities of poverty and hunger while impacting many lives and futures. We cannot achieve racial equity if we do not also achieve health equity for all Americans.”

Camp Hill-based Rite Aid launched The Rite Aid Foundation, now Rite Aid Healthy Futures, in 2001

New Jersey-based real estate investment firm acquires Summerdale Plaza

Summerdale Plaza, a 141,451-square foot retail shopping center at 429 N. Enola Road, East Pennsboro Township, Cumberland County was acquired by Red Bank, New Jersey-based First National Realty Partners.

BizNewsPA reported that the deal was for $17.25 million and that the seller was Willner Realty & Development, headquartered in Ardmore. Willner was represented by Institutional Property Advisors’ Brad Nathanson, a release said.

Featuring a Rite Aid, AutoZone, Dollar Tree and Tractor Supply, Summerdale Plaza is 85% occupied.

First National Realty Partners LLC is a “vertically integrated real estate investment firm focused on acquiring institutional quality commercial real estate throughout the United States,” according to the release.

The purchase of Summerdale Plaza adds to the company’s rapidly expanding portfolio.

“We are very excited to acquire Summerdale Plaza,” Matt Annibale, senior director of acquisitions at First National Realty Partners, said in the release. “The remaining vacancy in the center provides meaningful upside for our investors. The property also includes one of the top Pennsylvania Department of Transportation locations in the state, which helps drive traffic to the center.”

Rite Aid to close 63 stores, expects further closures in the future 

PHOTO/FILE

Rite Aid plans to shutter 63 of its stores as part of the first phase of a new store closure program, the Camp Hill-based pharmacy chain announced in its third quarter results for 2021. 

The stores chosen for closure have yet to be named. The closures are expected to provide the company with an annual EBITDA benefit of $25 million. 

“Today, we also announced the first phase of a store closure program to reduce costs, drive improved profitability and ensure that we have a healthy foundation to grow from, with the right stores in the right locations, for the communities we serve and for our business,” said Heyward Donigan, president and CEO of Rite Aid. 

Rite Aid expects to increase the number of store closures in the coming months as it continues to review its 2,488 retail pharmacy locations across 17 states. Employees impacted by the closures will be able to transfer to other stores. 

In its third quarter results, Rite Aid reported $6.23 billion in revenues from continuing operations during the 13-week period ending Nov. 27—an increase from $6.12 billion during the same period last year. 

The pharmacy chain noted in its report that the 1.8% increase was driven by growth within its retail pharmacy segment, partially offset by a decline in its pharmacy services segment. 

The company reported a net loss from continuing operations of $36.1 million this quarter, a jump of 739% over the $4.3 million in the third quarter of 2020.  

“The increase in net loss is due primarily to higher facility exit and impairment charges driven by the company’s store closure decisions,” Rite Aid wrote in its report. “Other variance drivers include a LIFO charge in the current quarter compared to a Last in, First Out (LIFO) credit in the prior year third quarter and a lower gain on the sale of assets. These items were partially offset by an increase in adjusted EBITDA and lower depreciation and amortization expense.” 

Rite Aid announced in September that it will move its headquarters to Philadelphia early next year as it shifts to a focus on remote work. 

As part of the move, Rite Aid plans to open “regional collaboration centers” across the country that will allow its teams to work together when needed. Rite Aid hasn’t announced where these hubs will be located but has confirmed that one will be in the midstate. 

The midstate’s fastest growing businesses continue to invest in Cumberland County 

In September two major Pennsylvanian employers, Harsco Corp. and Rite Aid, announced they would be leaving their headquarters in Cumberland County to open new main offices in Philadelphia. 

Harsco explained in its announcement of the planned 2023 move that it was leaving the region to expand its infrastructure and have access to a more diverse hiring pool. For Rite Aid, the move is part of the company’s new “remote-first” strategy that could see it opening a regional office in the midstate. 

While Harsco and Rite Aid plan to leave their Cumberland County headquarters in the coming years, it is anything but a sign of things to come, said Ryan Unger, president and CEO of the Harrisburg Regional Chamber and CREDC. 

“Both companies made the decisions that they did based on their own employees and market competition and things like that,” said Unger. “Whenever you look at a region and its industrial heritage, you will see times where companies evolve, grow and shrink and this is part of that process.” 

So, while Rite Aid and Harsco are moving, other local employers are doubling down on the region, citing its assets for raising a family, and proximity to major cities and the state capital. 

A Giant investment 

Nicholas Bertram. PHOTO/PROVIDED

In the last three years, Carlisle-based The Giant Company has grown its employee base by 5,000, acquired four companies and launched multiple new services and partnerships. That growth has been mirrored in the company’s Carlisle headquarters, which received an expansion this year that included remodeling, upgraded technology and a new auditorium. 

The campus also houses Giant’s sister companies Retail Business Services, ADUSA Supply Chain Services and Peapod Digital Labs. 

Giant views each of its 190 locations as a headquarters given the company’s emphasis on community, however, investing in the midstate as the center of the company’s operations has proven fruitful, said Nicholas Bertram, president and CEO of Giant. 

“The people who grew up here absolutely love it and the people who came here, like me, absolutely love it,” Bertram said. “There are great schools, great infrastructure—It’s a wonderful place to live. If you look at the growth in Cumberland County, it’s clear that a lot of people are moving into this area.” 

Bertram pointed out out another major asset to the company, the region’s highway system, which it relies on for its distribution center in Cumberland County, dry grocery storage in York and frozen storage campus in Lancaster. 

As Pennsylvania’s second largest employer, Giant also values its proximity to Harrisburg. 

“For those companies with more influence on the Commonwealth, it makes sense to be closer to the capital,” Bertram said. 

Calling the West Shore home 

Philip Brenckle. PHOTO/PROVIDED

Home remodeling company West Shore Home in Mechanicsburg has expanded to 11 states over three years—a feat the company attributes to a consistent and predictable strategic growth plan and an initial acquisition that brought the company into North Carolina, South Carolina and Georgia. 

“We are focused on making home remodeling fast, easy, convenient and having a focus on customer service,” said Philip Brenckle, CFO at West Shore Home. “For right now, as we scale nationally, we are staying within our verticals to make sure we offer the best experience in windows, doors, showers and baths.” 

West Shore Home employs about 1,700 people, which is up 750 employees since the pandemic started. 

“We grew just as rapidly prior to the pandemic as we did during, and we look to continue to grow,” said Brenckle. “We saw a surge during the pandemic. The biggest opportunity we seized during the pandemic was the labor force. Many companies were going to shed labor and once we realized that we decided to go on the offensive.” 

West Shore Home’s employee growth caused the company to add more corporate positions in human resources, legal, accounting and more, adding up to 400 corporate positions. 

The remodeling company opened a new corporate headquarters in Mechanicsburg this year. The open design concept features 56,184 square feet and room for more than 560 employees. It has an in-house coffee café, employee training center, private breakout rooms and a podcast studio. 

West Shore Home’s investment in the midstate comes from its origins in the region as well as the positives that the region holds for employees, said Brenckle. 

“Our founder was born and raised in Pennsylvania, this is the birth place of our company,” he said. “Just as importantly, we believe that Central Pennsylvania has a lot to offer: exceptional costs of living, it’s close to a lot of major cities and there’s access to large major markets.” 

Selecting the midstate 

Bob Ortenzio. PHOTO/PROVIDED

Select Medical in Mechanicsburg is the country’s largest post-acute care company at $6 billion in revenue. 

This year the company joined the ranks of the Fortune 500, something that Bob Ortenzio, co-founder and executive chairman attributed to the region the company started in. 

“This area supported the company and helped us grow from a pure startup to a Fortune 500 Company,” Ortenzio said. “It supported us as a small company, through huge growth years and it supported us in being a national leader in what we do.” 

In the last five years, Select Medical has doubled in size from $3 billion in revenue to $6 billion and currently operates 140 specialty hospitals, 1800 outpatient clinics and 522 occupational medicine centers. 

Within the midstate alone Select Medical operates four hospitals, two occupational medicine locations and 40 outpatient clinics.  

The company’s campus consists of six buildings in Mechanicsburg with a majority of its services centralized to the campus. A portion of its operations are also located at an office building in Camp Hill. 

“We would never move from Central Pennsylvania. We want to continue to invest in the region, invest in our people that are here,” said Ortenzio. “It may not be the best to access our West Coast operations, but we do a lot of work in DC, a lot of our banks are in New York and we have a lot of operations in the South—we have access to the whole Eastern seaboard from here.” 

Select Medical has found success recruiting staff for its Mechanicsburg headquarters thanks to the state’s strong educational institutions and the growing economies of the region’s cities, said Ortenzio. 

“I believe in the continued growth for the city of Harrisburg. The company and I have supported places like Harrisburg University which continue to grow,” he said. “This area has grown a lot. It’s been great for our employees and we are a big advocate.” 

Ortenzio also pointed out Harrisburg International Airport as a nearby asset for Select Medical, noting that while it is not as big as an Atlanta or Philadelphia airport, the company still brings clients to the region through the airport. 

“We have a lot of people who travel here and say that Harrisburg is a joy to fly out of. You can get to Atlanta, Chicago, Charlotte, Nashville and Philadelphia,” he said. “We have an airport; we have a great base for education and we have good housing. What more does a growing company need?” 

Improving on a good thing 

Ryan Unger. PHOTO/ PROVIDED.

Part of the region’s success as a place for businesses to grow as quickly as organizations like Select Medical, West Shore Home and Giant have, is that the midstate’s economic centers follow the “15-minute city” residential urban planning concept, according to Unger. 

In residential planning, the 15-minute city refers to the idea where a resident is able to get their daily necessities by foot or by bike within 15 minutes—an idea popularized by French cities expert Carlos Moreno. Those necessities include education, health care, arts and culture, parks and recreation, grocery stores and walkability and transit. 

“You want to check all of those boxes off. When we speak with businesses that want to come here, we highlight that,” Unger said.  

Organizations like the Harrisburg Regional Chamber continue to find ways to create workforce development programs with area business leaders to ensure that midstate businesses continue to have access to talent. That doesn’t mean that the region doesn’t already have a diverse talent pool to draw from, said Unger. 

“We have a great workforce here. (West Shore Home, Select Medical and Giant) wouldn’t be able to grow if they didn’t have employees and access to talent,” he said. “We want to continue to work on that. We have all the assets we need here in the region to succeed.” 

Harsco Corp. plans to relocate headquarters by 2023 

 

Environmental solutions provider Harsco Corp. plans to relocate its Camp Hill headquarters to Philadelphia, the second large regional company to do so this week. 

The move will see a majority of Harsco’s corporate employees relocate to Philadelphia by January 2023. It was prompted by a need for a more diverse workforce and the resources that a larger city provides, Nick Grasberger, chairman and CEO of Harsco said in a statement to the Central Penn Business Journal. 

“We are confident that this move to America’s sixth largest city will provide us with more options to the future resources needed to fuel our growth including a strong infrastructure, a much larger and diverse talent pool, and closer proximity to our customers and federal government agencies,” Grasberger said. 

Harsco was founded in 1853 and has operated in South Central Pennsylvania for more than 165 years.  

The company provides environmental solutions for industrial and specialty waste systems and technology for the rail sector. It employs 12,000 people in more than 30 countries. 

Most of Harsco’s employees in Camp Hill have been offered the chance to relocate to the new location. Employees at Harsco’s Reed Minerals business will remain in Camp Hill, as well as a few other back-office employees, said Jay Cooney, chief marketing and communications officer at Harsco. 

The company has yet to announce its plans for its Camp Hill Headquarters. 

“As the future becomes the present, we remain committed to our employee care value with the hope that the majority of our employees will join us on this next step in our journey,” said Grasberger. “We will share more information about our relocation in the coming months.” 

Harsco is the second major Camp Hill employer this week to announce its exit from Cumberland County following Rite Aid’s announcement on Tuesday that it would be closing its local headquarters in favor of a smaller, more remote-focused workforce operating out of Philadelphia. 

As part of the move, Rite Aid plans to open “regional collaboration centers” across the country that will allow its teams to work together when needed. Rite Aid hasn’t announced where these hubs will be located but has confirmed that one will be in the midstate. 

 

Rite Aid to grow corporate team, open new collaborative hub in Central Pa.

 

Rite Aid may be moving its headquarters from Camp Hill, Cumberland County to Philadelphia but thanks to its new remote-first initiative, the pharmaceutical chain plans to expand its corporate team of 700.

Rite Aid announced on Tuesday that it will be relocating its headquarters to a new Philadelphia location early next year as it moves to a new focus on remote work.

As part of the move, Rite Aid plans to open “regional collaboration centers” across the country that will allow its teams to work together when needed. Rite Aid hasn’t announced where these hubs will be located but has confirmed that one will be in the midstate.

“This is about building a reimagined workplace, where our associates have the flexibility they prefer and also have innovative, modern and new spaces that demonstrates a new Rite Aid,” said Brad Ducey, senior manager of external communications at Rite Aid.

Rite Aid doesn’t expect to see any layoffs as part of the move to Philadelphia and instead is actively hiring and looking to grow its corporate team, according to Ducey.

Rite Aid has yet to announce plans for its current properties in the region, including the company headquarters at 30 Hunter Lane, Camp Hill.

Rite Aid to leave Camp Hill 

 

Rite Aid plans to relocate its headquarters from Camp Hill, Cumberland County to Philadelphia as part of a new focus on remote work. 

The national drugstore chain said on Tuesday that it will be reimagining its workplace model to do away with office spaces and instead focus on “in-person collaboration and company gatherings” at a new headquarters in Philadelphia. 

Rite Aid has yet to detail what the new initiative means for its corporate offices at 30 Hunter Lane, Camp Hill, but said it plans to create what it calls regional collaboration centers across the country that will allow Rite Aid teams to work together for in-person meetings, training and development and more. 

The move to this remote work focus was spurred by an internal survey among Rite Aid’s corporate associates, which found that a vast majority preferred working from home, according to a Rite Aid press release. 

“We’re changing our business from the inside out, and our reimagined workplace is the latest exciting step toward the future of this company,” said Heyward Donigan, CEO of Rite Aid. “We believe in remote work, and as we lean into it for the long term, we are investing in a physical footprint that will facilitate its best version. We’ve heard directly from our associates that teams want and need to meet in-person, and we think we’ve found the right balance between the flexibility of remote work and the power of on-site collaboration.” 

The pharmacy chain currently plans to locate its new headquarters to Philadelphia’s Navy Yard district. The new location would feature space for teams across Rite Aid’s various businesses, including Rite Aid retail, Elixir, Health Dialog and Bartell Drugs. 

“This transformation of our workforce brings Rite Aid into the modern era of work. We can recruit the best talent regardless of their location, and we can give our corporate associates the freedom and flexibility that today’s workers crave,” said Jim Peters, chief operating officer at Rite Aid. “Our new headquarters and collaboration centers will have a unifying effect on our enterprise and serve as an important space for our teams to be together when needed.” 

Rite Aid operates 2,500 retail pharmacy locations across 17 states. It was founded in Scranton in 1962.