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NY Company Set To Buy SAJ Distributors

Posted: 02/20/2013
Author: Rob Moritz of the Arkansas News Bureau

Little Rock -- A Brooklyn, N.Y.-based company announced Wednesday that it has agreed to buy the assets of a Pine Bluff product distributor that was part of Walgreen Company's purchase of the USA Drug chain and keep the operation largely unchanged.

L&R Distributors Inc. said it has entered into an agreement to buy the assets of SAJ Distributors and the private label line Select Brand from Walgreen Co.

A spokesman for L&R said SAJ would employ about 150 workers at the distribution center and about 90 salespeople.

Walgreens, based in Deerfield, Ill., bought SAJ, formerly owned by Stephen L. LaFrance Holdings of Pine Bluff, in July as part of its $438 million purchase of the USA Drug chain.

Terms of the agreement between L&R Distributors and Walgreens were not disclosed Wednesday.

L&R said it will operate the distribution center and offices in Pine Bluff under the SAJ name and retain many of the existing staff who work in customer service, accounting, purchasing and operations.

"L&R will also maintain the existing SAJ sales staff, delivery methods and inventory mix," SAJ said in a news release.  "This will ensure a 'no change' turn-key solution for the existing SAJ family of customers.  Over time, L&R's SAJ Division will introduce new items, categories and unique promotional programs which are currently in place and available to L&R customers across the country."

The head of the Pine Bluff economic development agency welcomed the purchase agreement.  "L&R will keep (SAJ) vital and looking at growth," said Lou Ann Nisbett, president and CEO of the Economic Development Alliance of Jefferson County.  "I'm happy to have been working with L&R on this.  It's a good thing for Pine Bluff."

SAJ employs about 250-300 workers, according to Chris Hart, chairman of the Pine Bluff Chamber of Commerce Board and vice president for personnel and community relations at Central Moloney.

Reilly Murray, senior vice president of L&R, said he did not know the exact number of SAJ employees but that his company would employ about 150 workers at the distribution center and 90 salespeople.  "We're a national distributor and saw an opportunity," Murray said, adding that the new center will enable L&R to expand its distribution.

"We bought them because of their location as well," Murray said.  "We have a warehouse on the West Coast in the L.A. market as well as a warehouse on the East Coast in New York, so obviously if you look at the logistics of Pine Bluff, its perfect."

Nisbett said she could not divulge specifics about negotiations, although she said the deal would likely be finalized early next year and that some company employees likely would look at retirement with the transaction.

L&R is a national distributor of beauty and general merchandise products and claims more than 7,000 points of distribution across the country.  "For us, (Pine Bluff is) a starting point and we're actually going to add to it, and add other elements of our business into that warehouse because it has capacity," Reilly said.  "For us, for future employment, we see it as a plus-plus."

Walgreens announced in July that it had purchased the USA Drug regional chain, which includes Super D Drug, May's Drug, med-X and Drug Warehouse.  In September, Walgreens announced that 76 of the 144 USA Drug stores and other brands in Arkansas and six other states would close by November.  Twenty-four of the stores closed were in Arkansas.

Walgreens is the nation's largest drug chain and last year had sales of $72 billion.  The company operates 7,890 drug stores in all 50 states, the District of Columbia and Puerto Rico.

USA Drug and the other drugstores in the chain recorded sales of $825 million last year, according to Walgreens.

--Reporters Rick Joslin and Michael Lee of the Pine Bluff Commercial staff contributed to this report.



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