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Rite Aid to retreat from Florida

Rite Aid Corp. will pull out of most of Florida this summer, costing about 700 people their jobs and shutting down all 19 of its drugstores in the Tampa Bay area.

The nation's third-largest drugstore chain, Rite Aid said Wednesday that the move is part of a plan to concentrate in markets where it has a bigger share of the business.

Rite Aid will be closing 72 stores across the state outright and selling 37 others, all of them in South Florida, to Clearwater-based Eckerd Corp. in a deal valued at $75-million.

Rite Aid also will close a distribution center in Melbourne that supplied its 109 stores in Central and South Florida.

Only 24 Rite Aids in the northern part of the state will remain part of the chain.

Rite Aid chairman Martin Grass said the company's Florida operation, which generated annual sales of $190-million in the last fiscal year, has been "marginally profitable."

Rite Aid's departure will affect both its Rite Aid stores and the Rite Price chain, a small, deep-discount drugstore operation.

The closings also will leave good-sized empty spaces in Tyrone Square Mall in St. Petersburg, University Mall in Tampa and Countryside Mall in Clearwater.

The Tampa Bay drugstore market has grown far more competitive in the last several years as Walgreen's continued on a building binge and grocers and discount chains moved aggressively into the pharmacy business, which had long been dominated by Eckerd.

While not an estimate of market share, customer traffic estimates in the 1994 Scarborough Report show 30 percent of Tampa Bay prescription buyers said they had been in a Rite Aid in the past month. That put Rite Aid in ninth place among Tampa Bay drugstore and grocery chains.

Eckerd, the nation's fourth-largest drugstore chain, will add 37 Rite Aid stores to its Florida collection of 550 stores. Rival Walgreen's has 337 stores in Florida.

"The acquisition presents an opportunity for Eckerd to strengthen its presence in existing markets," said Stewart Turley, Eckerd's chairman and chief executive officer. Eckerd also acquired the prescription lists for all 109 Rite Aid stores that are being vacated.

Eckerd acquired only stores "that resulted in no duplication or overlap of our current store service areas," said Eckerd spokesman Gerry Hoeppner. Eckerd also got all the inventory, liquor licenses and fixtures in the 72 stores that will close.

The deal is scheduled to close within 45 days, subject to government approval that the deal has no antitrust implications.

Eckerd will pay cash, all of which will be raised from an offering of 2.5-million shares of stock that were authorized but never issued. Eckerd will raise about $77-million in the offering if Wednesday's stock closing price of $30.87{ holds. The rest of the offering proceeds will be used to pay down more of Eckerd's high-interest debt.

Merrill Lynch Capital Partners, which owns about 32 percent of Eckerd's stock, will be among several big shareholders putting 2-million more shares up for sale in the same offering. Merrill Lynch has been slowly whittling down its ownership stake in Eckerd, a company it took private in 1985.

Trading in Rite Aid shares closed at $26 Wednesday, up 75 cents. Rite Aid said profits from the sale of stores to Eckerd would not affect earnings because the company has had to put a like amount in reserve to buy out the unexpired leases of the stores Eckerd is not buying.