Drug-Sav purchase gives Eckerd more Texas muscle

Drug Store News, Sept 12, 1994

CLEARWATER, Fla - Eckerd Corp. has strengthened its market position in eastern Texas with the recent acquisition of the 13-store Drug-Sav chain based in Tyler, Texas.

Three of the Drug-Sav stores will be converted to Eckerd stores, but the remaining 10 will be closed, according to an Eckerd spokesperson. No purchase price was disclosed.

Founded in 1970, Drug-Sav grew to its current size with stores in East Texas towns such as Athens, Jacksonville, Palestine, Longview, Mt. Pleasant, Marshall and Pittsburgh. Its takeover extends the rapid recent consolidation of chain drug retailing as big players like Eckerd move to strengthen their market penetration in advance of health care reform and managed care.

"Eckerd and Drug-Sav had so many markets in which we are common competitors that it was a perfect match for Eckerd," said Drug-Sav chairman and president Michael Simpson, whose involvement in NACDS has made him one of the drug industry's best-known small-chain executives. "We were the primary chain drug competitors, and we had a lot of stores right across the street."

Strong sales

Simpson said sales at the chain for the last four years have been strong. Sales for 1993 were the best in the chain's history, although Simpson declined to disclose them.

"This really was an opportune time for them and for us," he said of the sale.

For Eckerd, the deal means an expanded base of prescription drug customers in a key region east of Dallas/Ft. Worth. Said Stewart Turley, Eckerd chairman and chief executive officer, "Our acquisition of the Drug-Sav operations is an excellent opportunity, and is consistent with our objective of strengthening our presence in existing markets."

Texas is already home to 481 of Eckerd's 1,714 stores.

Simpson and Drug-Sav are familiar to many in the chain drug industry. Simpson and Turley have known each other for 15 years and serve together on the NACDS Board of Directors. Simpson has also been active with several NACDS committees.

Although he may be out of the drug store business, Simpson told Drug Store News he will remain involved in other corporate operations, including a chain of 18 convenience stores and real estate development.