The Jean Coutu chain branched into the States recently, and got clobbered. They bought the Eckerd and Brooks drug store chains from J.C. Penney and got mired in outdated stores requiring extensive renovations. Maybe they paid too much. At any rate, they had no money for the needed renovations.
Today it is announced that they are selling these stores to RiteAid for cash plus 30% ownership of RiteAid. Sounds like a good deal to me. Their stock was up yesterday on the news of a likely deal. Wel'll see what it does today.
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The executives of a company makes critical decisions that either increase or decrease wealth and prosperity to the company, and, ultimately, to society. The result of wise decisions is profit -- something that is despised by many in Canadian society today as evil. The result of unwise decisions is loss. The value of a wise executive cannot be overstated. Let's hope this works out for the hard-working and industrious Coutu family and the enterprise they run, along with its shareholders, employees, customers, not to mention the governments and citizens that also benefit through the taxation system.
1 comment:
I always felt that the Jean Coutu chain was very successful.
I was disappointed to find that their US venture was not working out. It is not surprising though. Canadian companies often find it difficult to succeed in the US market.
Jean Coutu was following in the footsteps of such previous luminaries as Canadian Tire and CIBC.
Fortunately, they will come out relatively unscathed. Managers have to take risks. It is a wise manager who knows when to get out and not lose his shirt.
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