Rite Aid moves swiftly to integrate K&B, Harco

Drug Store News, Sept 8, 1997 by Lisa I. Fried

CAMP HILL, Pa. - Since the Federal Trade Commission approved Rite Aid's acquisitions of 186-store K&B and 146-store Harco on Aug. 27, the company has moved quickly to begin integrating the operations of these two chains into its own corporate structure.

The majority of the senior managers at both K&B and Harco left their jobs the week the merger was completed. Most of the remaining corporate employees at both chains will stay to help with the transition, but will eventually lose their jobs, according to Sarah Datz, a Rite Aid spokesperson. Rite Aid will hire a handful of K&B and Harco corporate staff members, Datz, said, but specific details were not available at press time. All Harco and K&B store associates will become Rite Aid associates.

All of K&B's and Harco's corporate associates will receive severance packages that include job search assistance. K&B's New Orleans, La.-based headquarters and Harco's Tuscaloosa, Ala.-based headquarters will ultimately be closed down, as all corporate functions will be handled out of Rite Aid's Camp Hill, Pa. headquarters. Rite Aid has already relocated executives from its own Camp Hill, Pa.-based corporate headquarters to both K&B and Harco headquarters to supervise the integration of the chains.

K&B operates stores in Louisiana, Alabama, Mississippi, Texas, Tennessee and Florida. Harco operates stores in Alabama, Mississippi and Florida. Rite Aid does not plan to close any of these stores, Datz said. The chain will also continue to operate both chain's distribution centers, as well as K&B's ice cream plant, for the time being.

All of the K&B and Harco store banners will be changed to Rite Aid next year in a process that will begin in January and be completed by Spring, according to Datz. Alabama, home to both Harco and K & B stores, will be the first market to see the Rite Aid banner.

Rite Aid ultimately plans to renovate the stores of these chains, adding its Rite Express mail and shipping departments and one hour photo departments to stores that don't offer similar services. Harco currently does not operate any one hour photo labs.

Other changes to the stores will include upgraded cosmetics and vitamin departments and an expanded seasonal merchandise mix. This fits in with Rite Aid's strategy to boost sales in these departments in all of its stores.

Now that the merger is complete, Rite Aid operates 3,963 stores in 31 states and the District of Columbia. The merger is expected to boost Rite Aid's annual revenues from $11 billion to an estimated $11.9 billion.