Page 8 July 6, 2017 Rite Aid from front page Redondo Beach and Rolling Hills Estates will get a reprieve. The company said it will use the proceeds from the Walgreens deal to strengthen its finances and to pay down existing debt. Because Walgreen backed out of the original merger deal, it agreed to pay Rite Aid a $325 million termination fee, the company said. “While we believe that pursuing the merger with [Walgreens] was the right thing to do for our investors and customers, this new agreement provides a clear path forward and positions Rite Aid as a strong, independent, multi-regional drugstore chain and pharmacy benefits manager with a compelling footprint in key markets,” Standley added. Rite Aid said it expects the scaled-back merger to be approved by federal regulators, and that the deal should close by year’s end. Financial analysts said in the days leading up to the Walgreens-Rite Aid announcement that online retail giant Amazon is interested in entering the retail pharmacy business, and that Rite Aid’s remaining 2,100 stores could be an acquisition target for Amazon CEO Jeff Bezos, who just purchased the Whole Foods grocer. Walgreens is among the top-five largest U.S. drugstore chain in prescription drug sales and has more than 8,000 stores nationwide. CVS has 9,600 stores nationwide and is pushing Walgreens, which until last year was the top-grossing U.S. retail pharmacy. Rite Aid, which had ranked next in retail pharmacy sales through its 5,200 stores, dropped last year to fourth place behind Wal Mart, according to 2016 industry data. Rite Aid’s presence in the South Bay is much smaller than Walgreens or CVS. However, the former Thrifty Drugstore chain and its iconic ice cream brand have a long history in the Los Angeles area. Brothers Harry and Robert Borun in 1929 opened their first Thrifty Cut Rate store in downtown Los Angeles. The original Thrifty’s was located across the street from the original B Thrifty Cut Rate. The brothers opened five more downtown-area stores, and then expanded beyond the city center to the Mid-Wilshire district in 1931. By the early 1940s, Thrifty Drug Stores operated 58 stores, and the Southern California-based chain opened its 100th store in 1950. Thrifty stores dotted cities between Santa Rosa and San Diego and ran a radio commercial that was a staple on L.A. stations for a decade. “Save a nickel, save a dime. Save at Thrifty every time,” the jingle said. The Rite Aid chain started as the Thrif D Discount Center in 1962 and within three years added 21 retail stores. The 22nd store added It’s Chip(ped) City After Chris Paul Departure By Adam Serrao Fans can now safely say that they have witnessed the Los Angeles Clippers play the best brand of basketball that their team will ever play. That’s assuming that there will be any Clippers fans left after the midway point of next season. When Chris Paul was traded to the Houston Rockets last Wednesday morning, the Clippers and their fans traded in six years of bravado that they had built up--which, even still, couldn’t get them past the second round of the playoffs. Now, with Paul gone and Jerry West in as a new team advisor, the Clippers will begin the long process of rebuilding with the sole hope of becoming the team that they used to be just two months ago. Chris Paul was the one shining hope of the Los Angeles Clippers that really the team should have never had in the first place. Once the league and ex-NBA commissioner David Stern stepped in and pried Paul away from the Lakers and stuck him in the Clippers locker room, though, the Clippers immediately had hope like they had never had hope before. A team that has never made it past the second round of the playoffs, the Clippers’ best record before Paul arrived was a 47-win season in 2005-06. That is, unless you count the 1974- 75 Buffalo Braves team that won 49 games before they moved to San Diego and then ultimately to Los Angeles. Unless you’re a huge fan of Elton Brand, Cuttino Mobley, Sam Cassell and the rest of the Clippers that lost in the Western Conference semis to the Phoenix Suns, you can say that Chris Paul brought the best basketball that the Clippers have ever played to the city of Los Angeles. In the six seasons that he was with the team, the Clippers won under 50 games just once (in his first year in L.A.) and made the playoffs every single year. With the best player in Clippers history now calling Houston home, the team that used to be called “Chip City” by its fans has virtually zero shot at winning a “chip” at any point in the near (or far) future. Even with Paul, there was always a sense surrounding the team that they just weren’t good enough to beat the other squads forming the Western Conference elite- -whether it was Golden State, San Antonio, or even Houston in the past. Now, without Paul, the Clippers have immediately regressed into the team that they used to be in what seems to be the blink of an eye--or maybe even the clip of a pair of scissors--despite what team executives will tell you about the five-year, $173 million contract that they just foolishly handed over to Blake Griffin (who has missed a total of 83 games due to injury over the past three seasons). Diehard fans, if they truly exist and haven’t already strengthened Golden State’s numbers, will tell you that everything will be okay. Jerry West is there now. The team will rebuild, sign free agents, and be even better in the coming years. The fact remains, however, that anyone wishing to go to Los Angeles to play professional basketball in the NBA isn’t going to choose to play for the Clippers over the team that occupies the neighboring locker room in the Staples Center. Even though the Clippers have outplayed the Lakers over the last six seasons, they still are--and always have been--the Lakers’ little brothers. The Lakers have a certain appeal and a certain aura about them, and the Clippers simply can’t compete with that. Los Angeles is about Hollywood and the bright lights. It’s about winning championships. The Lakers have those banners. Meanwhile, the Clippers have drama between a head coach/president of basketball operations and the favoritism that he showed toward his son that forced one of the best players in the league to take a pay cut to play deep in the heart of Texas instead of alongside the glitz, glamour and ocean breezes of Southern California. “We were knocking on the door of being very successful, and we just didn’t get it done,” Clippers coach Doc Rivers said when speaking about the Paul trade. Rivers is right. The Clippers tried, and tried their best, but still couldn’t get past the second round of the playoffs. Paul hasn’t gotten past the second round once in his entire career and there were no indications that next year would be any different. “That part is over. And that bugs me,” Rivers continued. “But we’re not done trying to reach our goal. Sometimes you gotta do it a different way. Because the way we tried to do it didn’t work.” Once again, Doc is right. But the new way in which the Clippers will attempt to approach success won’t be any different than the previous way that featured players like Paul, Blake Griffin and DeAndre Jordan. The Clippers roster will crumble sooner, rather than later, and Jerry West will find that the challenge he so longed for will be much harder than “The Logo “ originally anticipated it to be. The Clippers have had their chance at reaching greatness. Fans of the team were able to witness Paul and the rest of the roster play a level of basketball that the Clippers franchise has never played before. Even still, it wasn’t good enough to get anything more than a divisional championship banner up in the rafters. Clipper fans can put all of the hope that they can into Jerry West as a new team advisor because hope is all that they have. Paul’s departure has slammed the door shut on any optimism for the Clippers in L.A. The point guard’s exit to Houston has lifted the veil on a franchise that, despite its win totals over the past six seasons, has been just as dysfunctional as it has always been and now shows no signs of changing. • – Asixlion@earthlink.net a pharmacy, changing its name to Rite Aid, and the entire company officially adopted that name in 1968. Two years ago, it ranked as the largest drugstore chain on the East Coast, and the third-largest nationwide, with 4,600 stores in 31 states, according to Investopedia. So, what’s likely to happen to your friendly neighborhood Rite Aid store now that it won’t be swallowed up as planned by the much-larger Walgreens? One financial analyst writing for The Motley Fool thinks Walgreens’ decision to call off the mega-merger hurts Rite Aid’s prospects of hanging on in the competitive retail-pharmacy landscape. “There’s a lot of bad news for Rite Aid. The most obvious is that its stock took a shellacking, with shares plunging nearly 30 percent after the announcement that the acquisition wouldn’t happen. Rite Aid stock is now trading at its lowest level since the middle of 2013,” analyst and contributor Keith Speights wrote on June 30. Because Rite Aid will emerge from the latest agreement as a much smaller company, it will have significantly less revenue and cash flow. Speights says that shoppers might feel the pinch on drug pricing and elsewhere in the chain’s remaining stores. “The worst thing about its size being pared down is that Rite Aid must still compete against big pharmacy retailers like Walgreens,” he wrote. “Lower volume from fewer stores could put Rite Aid at a disadvantage in negotiating for prices. The company could also have less money to fund new initiatives to remain competitive with larger rivals.” Standley, the Rite Aid chairman, in a statement about the restructured deal, sought to assure customers that it would be business as usual in all of the stores, including those properties changing ownership in the next six months. “We have an outstanding team of associates and, with their continued support, we will work together to deliver a great customer experience, improve our business and deliver value to all of our stakeholders,” he said. Wall Street reacted negatively to the news of a slimmed-down Rite Aid chain. Its shares fell 30 percent to a near four-year low after last week’s announcement. One retail analyst said it was his opinion that Rite Aid has a long climb ahead to remain “relevant” in the retail pharmacy sector once the deal closes. Rite Aid’s pharmacy business has reported declining profits recently, and being smaller will make it tough to negotiate lower drug prices with wholesalers, most analysts believe. •
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