Pacific Northwest Bellevue-based Internet retailer drugstore.com said Thursday it has restructured its relationship with Rite Aid. Under the deal, drugstore.com...
Bellevue-based Internet retailer drugstore.com said Thursday it has restructured its relationship with Rite Aid.
Under the deal, drugstore.com will power a new, expanded Rite Aid online store for over-the-counter products, and Pennsylvania-based Rite Aid will manage its own “local pickup” offering, which allows customers to order prescriptions online and pick them up in Rite Aid stores.
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In return, drugstore.com, which had been managing Rite Aid’s local pickup offering, will receive a total of $10 million in 10 monthly payments from Rite Aid. Also, drugstore.com will receive fees for marketing Rite Aid’s local pickup offering on its Web site.
Drugstore.com said it now expects its third-quarter sales to range from $85 million to $90 million, down from the $118 million to $122 million it predicted in July. It estimates a quarterly loss ranging from $2.7 million to $3.7 million, compared with a previously projected loss of between $1 million and $2 million.
Boeing announces deals for 787s, 737s
Boeing signed a letter of intent with Gulf Air, Bahrain’s national carrier, covering orders for eight 787 Dreamliners worth about $1.68 billion at list prices.
The deal would raise the carrier’s total backlog for the model to 24, Boeing said in a statement on its Web site Wednesday night. The airline ordered 16 787s with options for eight more in January.
Boeing also announced Thursday that Saga Airlines has ordered two 737s, worth $149 million at list prices. The airline based in Istanbul, Turkey, also secured purchase rights for two more of the planes.
Boeing to advise Mitsubishi
Boeing will serve as a consultant to Mitsubishi Heavy Industries for its midsize regional jet — the first “made in Japan” passenger aircraft in three decades, the Japanese machinery maker said Thursday.
Mitsubishi has been a longtime partner with the U.S. aircraft maker, supplying the wing box for Boeing’s 787 and other aircraft.
Boeing signed a deal to advise Mitsubishi on aircraft development, sales and customer support for the planned twin-engine Mitsubishi Regional Jet, or MRJ, that seats about 70 to 90 people.
Terms of the deal weren’t disclosed.
Longs investors question CVS figures
Wall Street was surprised when CVS Caremark offered $2.7 billion to buy Longs Drug Stores, but some Longs shareholders say they’ll oppose the deal if Longs doesn’t tell them more about the value of its real estate.
On Aug. 12, CVS Caremark agreed to pay $71.50 a share for Longs, gaining more than 500 stores and expanding its presence on the West Coast. CVS valued Longs’ real estate at about $1 billion, citing the difficult real-estate market in California, where most of Longs stores are.
But CtW Investment Group said that price is too low. In a letter dated Monday, Richard Clayton of CtW Investment Group says the buyout price should have been between $76.62 to $78.81 a share, which would put the final price near $3 billion, on the high end.
At an investor conference Thursday, CVS Chief Executive Tom Ryan said he believes the deal will get the necessary two-thirds shareholder approval.
The tender offer expires Sept. 15, although Ryan noted it can be extended for up to a year.
He also said the Longs stores are more valuable to CVS than most other retailers, and not many banks and retailers are looking for sites that size.
Banks increase borrowing from Fed
Banks borrowed more over the past week from the Federal Reserve’s emergency lending program, while Wall Street firms took a pass for the fifth week in a row.
A Fed report released Thursday said commercial banks averaged $18.98 billion in daily borrowing over the past week. That compared with a daily average of $18.47 billion in the previous week.
For the week ending Sept. 3, Wall Street firms didn’t take out any loans, the fifth straight period of no action.
Their borrowing, however, averaged as high as $38.1 billion a day over the course of a week in early April.
Investment houses in March received similar loan privileges as commercial banks after a run on Bear Stearns pushed what was the nation’s fifth-largest investment bank to the brink of bankruptcy.
The situation raised fears that other Wall Street firms might be in jeopardy.
Bear Stearns was eventually taken over by JPMorgan Chase in a deal that involved the Fed’s financial backing.
The identities of commercial banks and investment houses that borrow are not released.
Toll Brothers sees hints of stability
Toll Brothers said Thursday it swung to a loss in its fiscal third quarter as weak demand for new homes forced the luxury builder to mark down the value of its land and unsold homes.
But Chief Executive Robert Toll said he is seeing signs the market is stabilizing.
The company had the lowest contract cancellation rate in more than two years, and more buyers are putting down deposits.
The Horsham, Pa.-based builder lost $29.3 million, or 18 cents a share, in the three months ended July 31. That’s a reversal from a profit of $26.5 million, or 16 cents a share, in the year-ago quarter.
European banks hold rates steady
The European Central Bank (ECB) and the Bank of England left their key interest rates unchanged Thursday, reluctant to move them lower as rising prices offset the fear of weaker growth and recession.
In London, the Bank of England kept its benchmark rate steady at 5 percent.
The Frankfurt, Germany-based ECB left its interest rate at 4.25 percent and warned of slower economic growth this year of between 1.1 and 1.7 percent, while growth next year in the 15-nation euro zone was expected to be between just 0.6 and 1.8 percent.
Compiled from The Associated Press