| Fate | Partially sold to CVS in 2004, Acquired by Rite Aid in 2007 |
|---|---|
| Founded | 1898 |
| Defunct | 2007 |
| Headquarters | Largo, Florida Warwick, Rhode Island |
| Products | Pharmacy, Cosmetics, Health and Beauty Aids, General Merchandise, Snacks, 1 Hour Photo |
| Parent | Rite Aid |
| Website | Eckerd.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 Caremark.,[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 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]
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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. Eckerd was the dominant drug chain in Florida, Texas, and Delaware.
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,[8] and renamed the stores in 2003.[9]
In July 2004, JC Penney. sold all of the Eckerd stores along the Eastern Seaboard from Georgia to Connecticut to the Jean Coutu Group. The other stores, mainly in the Southeastern and Southwestern United States, were sold to CVS. The other Eckerd stores that were sold to the Jean Coutu Group were merged with Coutu's other American pharmacy chain, Brooks Pharmacy. 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. 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 Corporation (now CVS Caremark Corporation) bought more than 1,200 Eckerd stores and converted most of them to CVS/pharmacy 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. The CVS purchase also included the Eckerd stores located in Colorado; however, CVS opted to close these stores.[10]
Jean Coutu kept the remainder of the stores, mostly in the Northeast and Mid-Atlantic U.S. states. Jean Coutu operated the stores it purchased under the slightly modified "Eckerd Pharmacy" name.
Eckerd was a unit of the Quebec-based Jean Coutu Group. The corporate headquarters was transferred from Florida to Rhode Island, the base of Jean Coutu's other U.S. chain, Brooks Pharmacy. The Eckerd and Brooks chains shared many of the same corporate functions. In addition, the Jean Coutu Group introduced an alternate version of the Eckerd Pharmacy logo featuring a red Eckerd capsule in an attempt to unify the Eckerd and Brooks chains.
On August 23, 2006, the Wall Street Journal reported that Rite Aid would acquire 1,858 Eckerd Pharmacy and Brooks Pharmacy US stores from the Jean Coutu Group for US$3.4 billion. 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.
The deal has also left Rite Aid with interesting locations within close proximity to each other to the point of competing with each other. (Only a small handful of stores have closed or were sold off to Walgreens, The Medicine Shoppe, or independent owners in order to meet federal regulations.) CVS went through a similar situation in the Chicago area after its purchase of Albertson's drug store chains. As a result, there are several cases where the stores are only a few blocks from each other, or even right next door to each other. This is particularly the case in Pennsylvania where Rite Aid (due to being based in Camp Hill, Pennsylvania, near the state capital of Harrisburg) and Eckerd (due to its Pennsylvania roots in Erie as well as stores that were once Thrift Drug having roots in the Pittsburgh area) were both dominant in the state.
Jack Eckerd, the son of the founder of the drug store chain, made a large donation to Florida Presbyterian College in St. Petersburg, Florida, in 1971, after which it was renamed in his honor as (Eckerd College).
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