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Analysts Say J.C. Penney Could Sell Eckerd Chain in Pieces

DALLAS - Retail analysts say J.C. Penney Co. may have more success selling its troubled Eckerd drug store chain piecemeal, The Associated Press reports.

The Wall Street Journal reported Thursday that J.C. Penney Co. is in discussions to split its 2,700-store Eckerd chain and sell it in pieces to CVS Corp. and Jean Coutu Group Inc., to get a better price.

Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting and investment banking firm, told the AP that CVS can't buy the entire chain because they could be in violation of antitrust laws.

"For Penney to maximize their price, they will probably have to sell it to a couple of people," Davidowitz said. CVS was a bidder for the Clearwater, Fla.-based Eckerd chain when J.C. Penny purchased the chain in 1996.

J.C. Penney spokesman Tim Lyons declined to comment to the AP on the company's plans.

"We are in discussions with interested parties, and the last public comments we made indicated we were progressing toward a decision," Lyons said. "It would be premature for me to make any comment about what might happen or will happen. I think we'll have to wait until we have something solid to announce. It seems apparently there had been people talking about various scenarios or different possibilities, but it's nothing we've commented on."

Helene Bisson, a spokeswoman for Jean Coutu Group, which owns Brooks drugstore chain, declined comment. A CVS spokesman also was unavailable for comment.

The Journal reported that Canada's Jean Coutu would buy 1,500 Eckerd stores in the Northeast, while CVS, which has a large presence in the Northeast, would purchase the other 1,200 stores elsewhere.

Sources also told the newspaper that J.C. Penney is continuing discussions about a bid from Rite Aid Corp., which submitted a cash-and-stock offer.
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