Rite Aid buys Lane; to keep 18 'Gold Coast' N.J. stores

Drug Store News, Oct 9, 1989

Rite Aid buys Lane; to keep 18 `Gold Coast' N.J. stores

SHIREMANSTOWN, Pa. -- Rite Aid has entered a definitive agreement to acquire Lane Drugs, a privately held chain of 22 stores located primarily in southeastern New Jersey's high-growth Monmouth and Ocean counties.

Final terms were to be determined after inventories were taken Sept. 27-29, said Rite Aid spokeswoman Suzanne Mead. Lane Drugs' 10,000-square-foot headquarters and distribution center, located in Lakewood, N.J., are not included in the acquisition, said Stephen V. Lane, president of the chain, who added that he would not be involved in post-acquisition operations.

Lane's stores, which average about 6,500 square feet, are considered a good fit with Rite Aid. "The stores are complementary in size, format and markets," Mead said. Rite Aid plans to close four of the 22 stores, Mead said, and will rename the rest this month.

Rite Aid currently has a relatively small presence in the two "Gold Coast" counties, and there is no overlap with Lane locations. Among communities in which Lane has stores are Lakewood, Toms River, Freehold, Neptune and Spring Lake. Lane also has some units in New Jersey's south-central Burlington County.

Lane has a 13.1-percent market share and Rite Aid an 8.3-percent share in the Monmouth-Ocean market, according to the 1989 Metro Market Studies. With the acquisition, Rite Aid's market share would approach that of Pathmark, which currently leads with a 22-percent market share.

The acquisition would bring the number of Rite Aid stores in New Jersey to 180, and the chain's total store count to 2,307.

Lane is equipped with pharmacy computers chainwide, and pharmacy accounts for about 50 percent of volume. The chain generated an estimated $29 million in sales in 1988.

Founded in 1960, Lane Drugs is unrelated to the former Lane Drug operation in Ohio, which Rite Aid bought from Peoples Drug earlier this year.