Longs Drugs Plans Store Relocations

The store closings are part of a plan in which Longs expects to expand its store base by a compound annual growth rate of 7% during the next five years, a strategy that will include a host of openings, closings, relocations and remodelings of its locations. During the second quarter, for example, Longs opened or acquired eight stores, closed 16 stores and remodeled 11 locations. The company is estimating capital expenditures for the full year to be in the range of $150 million to $200 million, mainly in connection with the store realignment program. It plans to open or relocate approximately 30 to 35 stores and remodel up to 46 stores for the year.

The 31 stores designated for disposition under this plan included eight California locations and 23 stores in Colorado, Oregon and Washington. Longs has sold or subleased approximately two thirds of the store locations and is marketing the remainder for similar dispositions.

Longs outlined its store plans during a conference call with financial analysts in which the company reported that preliminary income for the second quarter ended July 26 totaled $25.7 million and 67 cents per diluted share, a 33% percent increase compared with income of $19.4 million and 51 cents per share in the comparable period last year. Total revenues of $1.27 billion for the 13 weeks ended July 26 edged up 3% from the $1.24 billion reported in the comparable period last year. Same-store sales increased 1% percent, with pharmacy same-store sales increasing 1.8% and front-end, same-store sales increasing 0.3%.

Warren F. Bryant, the drug chain's chairman, president and CEO, commented that the company "has made progress in our retail segment by realigning and upgrading our store base." He said the company has also improved operations by increasing its self-distribution of front-end merchandise, installing supply chain system technology and other changes.