Walgreens in deal to acquire USA Drug chain for $438 million
Deerfield, Ill. — Walgreens Co. has entered into an agreement to acquire Stephen L. LaFrance Holdings Inc., the owner and operator of the USA Drug chain, for about $438 million, gaining stores in several Southern states. The acquisition comes on the heels of Walgreens’ announcement that it was buying a 45% stake in Alliance Boots GmbH for $6.7 billion last month to expand globally.
The transaction gives Walgreens 144 stores under several banners, including USA Drug, Super D Drug, May’s Drug, Med-X and Drug Warehouse. The acquired stores are located in Arkansas, Kansas, Mississippi, Missouri, New Jersey, Oklahoma and Tennessee.
The deal also includes corporate offices and a distribution center located in Pine Bluff, Ark., and a wholesale and private-brand business. It is expected to close Sept. 1.
Walgreens said that the acquired drug stores will continue to operate under their current brand names after the transaction closes. The chain said decisions will be made over time regarding the best, most effective way to harmonize Walgreens and the acquired brands.
“This acquisition expands our business in an important region of the country,” Walgreens president and CEO Greg Wasson said. “It will provide significant new pharmacy business for us in this region while also enabling us to bring the Walgreens experience to many additional smaller communities where USA Drug has developed strong operational expertise.”
Stephen LaFrance, who serves as owner and chairman of Stephen L. LaFrance Holdings, said the decision to sell the chain — which recorded sales of $825 million in 2011 — was “not only because it is the premier drugstore company in [our] industry, but also because Walgreens will continue to provide [our] customers with the service and products they have come to expect.”
The transaction is structured as a purchase of the stock of Stephen L. LaFrance Holdings, which owns most of the acquired business, and also includes the purchase of assets or stock of certain affiliated companies or stores and other parts of the business that are not owned by that holding company.
TJX, Ross continue discounter dominance
FRAMINGHAM, Mass. and PLEASANTON, Calif. — Fashion discounters continue to thrive in this economy, with TJX and Ross Stores continuing to report impressive monthly sales results.
TJX reported June sales of $2.3 billion, an increase of 9% over the $2.1 billion achieved during the same period last year. Consolidated comparable-store sales for the five-week period increased 7% over last year.
Carol Meyrowitz, CEO of TJX., stated, “We are very pleased our strong trends continued in June. Our 7% consolidated comparable store sales increase significantly exceeded our expectations and was achieved over 5% growth last year. It is great to see such consistent, strong performance across the Company, with all of our businesses in the U.S., Canada and Europe continuing to deliver excellent results. Customer traffic during the month increased substantially at every division which speaks to the tremendous appeal of our values, brands and fashions for consumers.”
Based on its strong performance in June, TJX is now expecting its quarterly earnings per share to be in the range of 52 cents to 53 cents, which would represent double-digit growth on top of double-digit growth in last year’s second quarter. The company is also raising its full year EPS guidance to $2.31 to $2.39.
Ross Stores monthly sales rose 12% to $886 million, up from $793 million for the same period last year. Comparable-store sales for the month grew 7% on top of a 5% increase last year.
Michael Balmuth, vice chairman and CEO, commented, "We are pleased with our better-than-expected June sales. Our ongoing ability to deliver terrific name brand bargains to today’s value-focused shoppers drove broad-based merchandise and geographic sales gains during the month."
Ross has raised its EPS guidance for the second quarter to range of 77 cents to 78 cents from its previous guidance of 72 cents to 75 cents.
Home Depot adds new line of appliances
Home Depot has announced the expansion of its major appliance brands by adding Whirlpool, Electrolux and Frigidaire in a limited number of stores and on Homedepot.com.
The appliances will be available through the company’s Depot Direct delivery network and available to be ordered in all U.S. stores. Depot Direct includes more than 3,000 appliances delivered and installed to the customer’s home within one to five days of purchase. Appliance purchases through Depot Direct include free delivery and haul-away.
"We are dedicated to offering the widest selection and assortment of top brands to our customers, and this expansion helps us deliver on that commitment," said Craig Menear, executive VP merchandising. "We are always looking for ways to improve the shopping experience for customers."
Electrolux described the expansion as a “staged rollout” of Electrolux major appliances under the Frigidaire, Frigidaire Gallery and Electrolux brands. The product line will include ovens, refrigerators, freezers, dishwashers and laundry machines.
“This is a new customer for us, and a fantastic opportunity to grow Electrolux while offering more consumers our innovative products,” said Jack Truong, head of Electrolux major appliances North America. “This new business accelerates our growth in North America and provides the opportunity to intensify our investments in innovation and benefit-driven design across the Frigidaire and Electrolux brands. All of our customers — including The Home Depot — will benefit from the investment to drive growth.”
“This is a new customer for us, and a fantastic opportunity to grow Electrolux while offering more consumers our innovative products,” said Jack Truong, head of Electrolux Major Appliances North America. “This new business accelerates our growth in North America and provides the opportunity to intensify our investments in innovation and benefit-driven design across the Frigidaire and Electrolux brands. All of our customers — including The Home Depot — will benefit from the investment to drive growth.”
Rival retailers Lowe’s, Sears, Menards and Sears also select Electrolux appliances, although in some cases, not every brand or kind of appliance that Electrolux makes.