GRAND RAPIDS, Mich. — Spartan Stores here last week said that it has reached an agreement to sell 12 The Pharm drug stores to Rite Aid, and that it was in negotiations to sell two additional locations, in moves that would exit Spartan from the stand-alone drug store business.
RiteAid, Camp Hill, Pa., is expected to pay $12.8 million in cash, plus the value of inventory, for certain assets of the 12 locations, in a deal that is set to close in 45 to 60 days, Spartan said. Spartan said it was in separate negotiations to sell certain assets of its remaining two Pharm stores in independent transactions. The 14 stores generated annual revenues of $125 million, Spartan said.
Spartan acquired The Pharm, a chain of discount drug stores in central and northern Ohio and southern Michigan, as part of its purchase of Seaway FoodTown in 2000. The Pharm was a 26-store chain at the time. The division has struggled in recent years partly as a result of certain employer prescription plans going to mail-order status. Spartan closed five money-losing Pharm locations last fall.
“The Pharm stores have been a good business for Spartan Stores and it is staffed with hard-working and dedicated associates, making this … a more difficult decision,” Craig Sturken, chief executive officer of Spartan Stores, said in a statement. “Divesting these stores, however, will allow us to concentrate efforts and resources on business opportunities with the best long-term growth potential and focus more on our core distribution and conventional supermarket operations.”