Brand Failures

78 Payless Drug Store
to Rite Aid
In 1998, Payless Drug Store, a regional chain of chemists operating across
western USA, changed its name to Rite Aid Corporation. The name change
required several million dollars spent on advertising just to gain a level of local
awareness equivalent to the previous brand name. The reason for the change
was the acquisition of the Payless Drug Store by the Rite Aid Corporation,
which owned its own brand of chemists throughout the United States. They
therefore thought the re-brand was a logical step. But what happened Soon
after the Rite Aid acquisition and brand conversion most of the former
Payless stores started to lose 10 per cent of sales every month. Eventually Rite
Aid sold 38 of the stores in California, cut down its workforce, and realigned
its West Coast distribution centre.