In the past few years, Walgreens also acquired Duane Reade and fortified its online presence with the purchase of drugstore.com. Walgreens also picked up Happy Harry’s, a strong regional player, in 2006. RELATED STORY: Beauty Chains Aim for Dominance >>
The deal for USA Drug buys the company instant access to stores in the mid-Southern U.S. markets. The Little Rock-based firm operates in Arkansas, Kansas, Mississippi, Missouri, New Jersey, Oklahoma and Tennessee under the Super D Drug, May’s Drug, Med-X and Drug Warehouse nameplates.
Also on Thursday, Walgreens said June sales fell 6.8 percent to $5.63 billion with a 10 percent decline in comparable-store sales. Taking the news together, investors were modestly positive. Shares of the company rose 0.9 percent to $29.87. Mark Miller, an analyst at William Blair, said although the USA Drug deal was relatively small, the stores to be acquired are profitable and should be “modestly accretive to earnings per share in fiscal 2013.”
Industry sources said Walgreens needs to offset concerns surrounding the debt it took on to fund the Alliance Boots deal. “The long-term effect of the acquisition of Boots is good, but it creates a cloud over Walgreens which has never had debt,” said one industry observer. “In the grand scheme of things, the USA Drug acquisition is minuscule.”
The deal includes corporate offices, a distribution center located in Pine Bluff, Ark., and a wholesale and private brand business. “This acquisition expands our business in an important region of the country,” said Walgreens president and chief executive officer Greg Wasson. “It will provide significant new pharmacy business for us in this region while also enabling us to bring the Walgreens experience to many additional smaller communities where USA Drug has developed strong operational expertise.”
The chain is owned by Stephen L. LaFrance Holdings Inc. and members of the LaFrance family.
“Under our ownership, customer service is what separates us from the competition and I know Walgreens can follow through,” Stephen LaFrance, chairman and owner of Stephen L. LaFrance Holdings, told WWD. “We have stores that can support large cosmetics and we have some smaller stores that are mostly apothecary.
“I will only be involved for 60 days,” he said. “The timing was right because my wife and children want me to cash out. I do believe, however, there is room for strong regional chains and that they can survive against the big chains.”
The company, which had sales of $825 million last year, grew from a Pine Bluff store LaFrance opened in 1968.
Walgreens said “decisions will be made over time” about how to “harmonize” the brands. With the exception of Duane Reade, Walgreens tends to rebrand acquired stores under its own nameplate. The USA Drug distribution center as well as its private label production could ultimately be sold off. “They bought market saturation,” said one source.
Some of the acquired chains are strong in the cosmetics business; others have a concentration on pharmacy. This purchase along with the stake in Boots could put greater strain on smaller beauty vendors. Walgreens is expected to add Boots products to all of its doors. “So let’s say you are adding three feet of Boots — some vendor has to go and it won’t be Procter & Gamble or L’Oréal,” said one seasoned industry executive. “Little brands on the wall could risk going away.”
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)