Joel Warady

Analyst: Rite Aid Could Be Next Takeover Target

February 19, 2010

FROM RETAILWIRE:
UBS Securities' analyst Neil Currie thinks that once Walgreens has had the opportunity to complete its purchase of Duane Reade, it might turn its attention to taking over some or all of Rite Aid's 4,800 stores. How likely do you think all or parts of Rite Aid will be sold?      [more...]

With all due respect to the analyst, I do not see a wholesale purchase of Rite Aid by Walgreens. What I do see happening is someone coming in and providing Rite Aid with the necessary capital to jump start their business, both on store refurbishment (badly needed) and marketing.

Rite Aid's new prototype stores stand right up there with both Walgreens and CVS, and their product selection is more complete. They tend to have a more sophisticated Private Label strategy, yet customers are simply not reacting to the great changes and strides they have made. They need to market more effectively, and drive more traffic into their stores, and all of this takes money.

Where is Bill Ackman when you need him?