FGX International wins Rite Aid’s supplier of the year award
SMITHFIELD, R.I. FGX International last month was awarded Rite Aid’s Supplier of the Year Award at that chain’s annual trade show and managers meeting held in Baltimore. FGX International supplies Foster Grant Sunglasses, Magnivision Reading Glasses and jewelry to Rite Aid.
“We can all take tremendous pride in the receipt of this award,” stated Alec Taylor, FGX chief executive officer. “As with all of our successes, it was a team effort. We have always valued our relationship with Rite Aid and look forward to many more years of success with them.”
“FGX International … has faithfully supported all Rite Aid’s efforts and plans over the years,” Rite Aid stated during the award ceremony. “Their commitment to excellence is evident in their account management, category and brand analysis, on-time and complete delivery performance, and an average 97 percent [direct-store delivery] service level.”
AmerisourceBergen celebrates Good Neighbor Pharmacy
Celebrating the 25th anniversary of its pharmacy network Good Neighbor Pharmacy at its July trade show, AmerisourceBergen officially rolled out a new pharmacy platform called Independent Edge that has been designed to improve community pharmacy performance across three core metrics—revenue and profit, improved patient care capability and increased operations efficiency.
“This is really a co-investment in the community pharmacy future,” Terry Haas, corporate senior vice president and president of AmerisourceBergen Drug, told a roundtable of reporters prior to the company’s opening general session.
Independent Edge consists of a three-pronged solution, the first of which will help independents better manage their front-end business. By profiling the independent pharmacy customer, AmerisourceBergen uncovered a portfolio of front-end products that help generate foot traffic, and has designed a planogram that will portfolios and aggregate that demand, what we do is raise the overall penetration in your pharmacies.” Across 20 pilot test stores, the front-end strategy across OTC categories generated between a 9 percent and 21 percent revenue lift.
The program also includes coaching on pharmacy business management and a platform of patient care services that “will help change the game with the managed care [business] as it exists today and ward off this trend toward mandatory mail and scripts leaving the pharmacy,” Haas said. In 13 pilot test stores, the business coaching contributed between $5,000 and $30,000 to the pharmacy’s bottom line profits per year.
AmerisourceBergen will execute a controlled roll out of Independent Edge through 2008 with the objective of having full adoption by the end of 2008.
As part of the introduction of Independent Edge, AmerisourceBergen officially rebranded its Performance Plus Network, a managed care network, to Good Neighbor Pharmacy Provider Network. According to AmerisourceBergen, the managed care network represents the largest network of community pharmacies in the country, with approximately 5,000 Good Neighbor Pharmacies and affiliates as its members.
All of AmerisourceBergen’s bets ride on community pharmacy. But it’s not a gamble, emphasized AmerisourceBergen chief executive officer David Yost. “We’ve become totally committed to the business you’re in,” he told an audience of 8,131 mostly independent pharmacy operators—Good Neighbor Pharmacy boasts a network of more than 2,700 stores. Though Yost claimed that the number of GNP storefronts was small, yet. AmerisourceBergen expects to attract some 800 more independents to the GNP model over the next year, he said.
Those who do sign up to the GNP model will not be encumbered with a long-term contract, Yost emphasized. “The fact that they can leave, that’s a strength in my opinion,” Yost said. “That’s the right way to run a program—[AmerisourceBergen] has to win their business every day.”
As part of its efforts to boost its independent pharmacy partnership rolls, AmerisourceBergen is targeting pharmacy school students. “Getting the word out to young pharmacists is a challenge,” Yost said. “The platform that we have will make it easier.” There is a really keen awareness among students that independents need that backbone economy of scale, leverage and reach that a partnership through Good Neighbor Pharmacy would afford them.
Haas reinforced that AmerisourceBergen is committed to the community pharmacy business. “This is a fundamental shift in our relationship” with you, he said. “We do not target the big-box chains; we do not target PBMs [or] mail order. [Community pharmacy] is our space.”
Accordingly, Haas noted that AmerisourceBergen has successfully divested its long-term pharmacy care business. “We made a conscious decision to get out of that space—that’s your space [and] we didn’t want to compete with our customer,” Haas said.
Self-distribution, closings lift Longs’ numbers
WALNUT CREEK, Calif.
Longs Drug reported another three months of strong sales for its second quarter as it generated a 40 percent increase in earnings, continued to open new stores and completed its withdrawal from three states.
Longs reported earnings of $25.7 million for the quarter ended July 26, a total that bettered the average forecast by analysts. Same-store sales inched up 1 percent, and revenue jumped 3 percent to $1.27 billion. Pharmacy same-store sales increased 1.8 percent for the quarter, with pharmacy benefit service revenues from its RX America division increasing 4.7 percent to $79 million.
“In addition to RX America’s growth, we made strong progress in our retail segment by aligning and upgrading our store base and increasing our self-distribution of front-end merchandise,” said Longs chief executive officer Warren Bryant during an Aug. 15 conference call.
He said Longs also produced better margins during the quarter mainly due to a higher volume of generic drug sales and the company’s ability to self-distribute most of its front-end product. Bryant said Longs has “already achieved our goal of self-distributing 80 percent of our front-end merchandise,” a goal it originally planned to reach by the end of the year. It also helped produce a slight 0.7 percent increase on front-end sales for the quarter.
Longs also added eight stores during the quarter and remodeled 11. Bryant said it plans to remodel up to 46 stores in 2007 and added that Longs would be “close to having 50 percent of [its] store base remodeled by the end of the year.” He also said Longs is on track to add 30 to 35 stores this year as part of its most ambitious expansion since the 1990s. The new stores average 20,000 square feet—about 1,500 square feet smaller than its older stores—and include drive-through pharmacies whenever space allows.
Another development was the completion of its exit from three states in the western United States that began in March. Longs closed 23 stores in Oregon, Washington and Colorado, noting that it had no long-term plans for those states and wanted to focus on such core states as California, Nevada and Hawaii. Longs also swapped six of the stores slated for closure with Rite Aid for six of its stores in Reno, Nev., in a deal that was completed in May.
The closings also put Longs back below the 500-store plateau it eclipsed for the first time earlier this year. Longs now has 492 stores, but it should pass the 500-store mark once again this fall with planned store openings.