Rite Aid Restructures Agreement With Drugstore.com

New York City Rite Aid Corp. said Friday it will restructure its relationship with online retailer drugstore.com so that it will now own the rights to the online service, allowing customers to order prescriptions at drugstore.com and pick them up in a Rite Aid store.

In return for the rights to the online service, drugstore.com will receive about $10 million total in 10 monthly installments from Rite Aid.

Additionally, drugstore.com will receive revenue for marketing Rite Aid's prescription pick-up service on the drugstore.com site, the company said.

Drugstore.com said the transfer of the pick-up service revenue to Rite Aid "will have an impact on total revenue," but added, "it will significantly strengthen our overall growth rate and gross margins and is consistent with our strategy to focus on our higher growth, higher margin businesses."

Drugstore.com said it is now targeting sales of $85 million to $90 million for the third quarter.

Under the new agreement, Rite Aid also will launch an online store through drugstore.com offering over-the-counter products. The store will be marketed to Rite Aid's customers and is expected to launch later this year, the company said.