2007 Departures: Eckerd Pharmacy ends with Rite-Aid buyout

In June 2007, a 109-year-old retail legacy came to an end. Rite-Aid Corporation completed its acquisition of Eckerd Pharmacy by purchasing Jean Coutu USA for $2.3 billion in cash plus $1 billion worth of stock.

The acquisition gave Rite-Aid more than 1,500 additional pharmacies in 18 states, and management believed the purchase would help it obtain economies of scale to become a stronger force in the marketplace. Rite-Aid trails Walgreen's and CVS in the race to be the country's largest drugstore, however.

The sale did away with a household name as management removed the Eckerd signage in the fall.

Eckerd Pharmacy opened in 1898 in Erie, Pennsylvania, founded by J. Milton Eckerd with $600 in savings and a small loan from a former employer. In 1912, that store was sold to his sons, and J. Milton moved to Delaware and opened a new store there. The chain expanded next to North Carolina and Florida, and went public in 1961.

The Eckerd legacy is one of innovation in retail. In the early days, it offered innovative new medicines like aspirin, along with other conveniences like personal hygiene items, candy, and tobacco (usually found only at grocery stores at the time).

Because Eckerd was a pharmacist, he was allowed to operate on the weekends, when other retailers were not. As the chain grew, other innovations were made. Eckerd hired store managers to oversee operations so the pharmacists could deal strictly with prescriptions. When department stores began offering high-end makeup, Eckerd brought more affordable cosmetics to his pharmacies.

There have been as many as 2,800 Eckerd stores in 20 states, and Eckerd was a big player in the marketplace in Florida, Texas, and Pennsylvania. Eckerd merged with JCPenney in 1996, and remained a part of that company until JCPenney sold all of the stores in 2004.

The Eckerd name isn't going away completely, however. J. Milton's youngest son, Jack, saved Florida Presbyterian College from financial ruin in 1971, and the following year the school was renamed Eckerd College.

This post was written as part of a series on on 2007 departures. Read about more products, companies and people you won't see in 2008.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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