DATE: Saturday, May 31, 1997                TAG: 9705310278

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER 

                                            LENGTH:   46 lines

ECKERD BUYS LOCAL REVCOS RULING ON CVS MERGER MAKES DEAL POSSIBLE

Say goodbye to Revco and hello to Eckerd.

CVS Corp. has agreed to sell 114 of its 234 Revco drug stores in Virginia, including all 79 stores in Hampton Roads, to satisfy antitrust concerns over the two companies' merger, the Federal Trade Commission said Friday.

After shedding those Revco stores, Woonsocket, R.I.-based CVS was able to complete its $2.8 billion buyout on Friday, creating the nation's second-largest drugstore chain in terms of sales. The two companies have combined sales of about $11 billion and 4,000 stores. No. 1 Walgreen Co. had almost $12 billion in sales last year at about 2,300 stores.

Eckerd Corp., a drug-store chain based in Clearwater, Fla., was happy to pick up the Revco pieces. The 2,800-store chain will get the Hampton Roads stores and 35 others in Virginia that meld nicely with the company's presence in the Carolinas.

``This purchase provides us with a solid presence in markets which are contiguous to our existing operations,'' said Frank Newman,

Eckerd's president, chairman and chief executive officer. ``These are good stores in good markets.''

Terms of the CVS-Eckerd deal weren't disclosed.

Eckerd, a subsidiary of J.C. Penney Co., is no stranger to Hampton Roads. It has three stores in Grafton, Newport News and Williamsburg that previously were called Thrift drug stores.

The Revco stores will be converted to the Eckerd banner beginning mid-June, an Eckerd spokesman said. The estimated 2,200 employees at the 114 Virginia Revco stores are expected to retain their jobs, he said.

At first glance, the sale of Revco stores in the Hampton Roads market doesn't seem to make sense, since Revco doesn't compete with CVS here. In Richmond, by contrast, the chains overlap.

That doesn't matter, federal regulators said.

FTC officials thought the CVS-Revco combo would reduce competition statewide, possibly resulting in higher prices for customers. Thus, they wanted about half of Revco's Virginia stores sold to another competitor.

The same antitrust concerns prompted the FTC to block Rite Aid Corp.'s attempt to buy Twinsburg, Ohio-based Revco last year. That merger would have created a chain with 4,800 stores and $11 billion in sales.

As part of the deal, CVS also agreed to sell six pharmacy operations in Binghamton, N.Y., to Medicine Shoppe International Inc. of St. Louis.

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