Walgreens confirmed its only buying prescription files and not brick and mortar stores among the pharmacy assets being sold across the U.S. by Rite Aid.
A U.S. Bankruptcy Court in New Jersey approved the sale of pharmacy assets from more than 800 Rite Aid stores to CVS Health, Walgreens as well as grocery store chains including Kroger and Albertsons.
But CVS appears to be the only major drugstore chain interested in brick-and-mortar stores, confirming plans to buy 64 Rite Aid stores in the pacific northwest U.S. CVS is also purchasing prescription files of 625 Rite Aid pharmacies across 15 states in markets already served by CVS pharmacies, the company said.
In Walgreens case, the company “did not acquire any brick and mortar locations,” a Walgreens spokesman said Thursday.
Walgreens “is not disclosing the number of stores it acquired files from,” the company said, but they are from stores in nine states: New York, California, New Jersey, Pennsylvania, Maryland, New Hampshire, Delaware, Idaho and Virginia.
“Community pharmacies play a critical role in delivering care where it’s needed most,” Walgreens said Thursday. “Walgreens is pleased to have reached an agreement with Rite Aid to acquire prescription files from select Rite Aid pharmacy locations in nine states, subject to customary closing conditions.”
Sale prices have yet to be disclosed for any of Rite Aid’s pharmacy assets. It’s a going out of business sale of sorts for Rite Aid after the drugstore chain filed for Chapter 11 bankruptcy protection last week for the second time in less than two years.
By buying the prescription files, CVS and Walgreens and others would avoid taking on more debt from brick-and-mortar stores. It’s common for pharmacy chains, other retailers and grocers in the pharmacy business to pursue prescription files and related pharmacy assets during Chapter 11 bankruptcy proceedings.
In Rite Aid’s case, the drugstore chain has buyers for “customer files at 810 of its stores, but failed to locate buyers for the files at 200 others,” Reuters reported Wednesday. As of Wednesday evening, the store locator on Rite Aid’s website listed more than 1,200 stores in 15 states.
CVS and Walgreens executives have already told their investors and others that they believe the retail pharmacy market has excess capacity.
Before Walgreens announced plans earlier this year to become privately held in a takeover by the investment firm Sycamore Partners for more than $10 billion, the drugstore giant was in the process of closing hundreds of stores. Walgreens had planned 1,200 store closures in the U.S. by 2027.
“We are taking the right steps to secure a successful future for Walgreens, centered on executing our turnaround plan and driving the business forward through strategic and operational efforts,” Walgreens said Thursday. “This path forward strengthens our ability to meet the needs of the patients and communities we serve. Walgreens has a long history of serving communities throughout the U.S. and we look forward to providing Rite Aid’s customers with greater access to a wide range of trusted pharmacy and healthcare services.”
