Amazon (NASDAQ:AMZN) has the potential to help out some struggling companies – the question is, would they, or, more importantly, what’s the benefit to them?
Rite Aid Corp. (NYSE:RAD), a pharmaceutical company, has sold 2,000 of its locations across the US. There are, however, still 2,500 stores left. Why would Amazon want to buy out a company like this? Well, there has been speculation that Amazon has its eye on the pharmacy benefit management business. To become involved in such a business, however, would mean obtaining state pharmacy licenses and acquiring infrastructure to sell the drugs. This is a lot of work, which is not to say Amazon wouldn’t be capable of such a feat, but it would be infinitely easier to simply buy out a company like Rite Aid. Doing so would give Amazon 19 state licenses immediately, plus the 2,500 stores and six distribution centers that Rite Aid still has in operation to sell the drugs.
Another struggling company that Amazon might find interest in is Rent-A-Center Inc. (NASDAQ:RCII). The rent-to-own business can be an excellent source of revenue if managed properly. Beyond that, and likely of more interest to Amazon is that Rent-A-Center has 2,500 locations. If Amazon were to buy out Rent-A-Center, they could easily turn those locations into warehouses and distribution centers, as well as for the already existing rent-to-own business.
Featured Image: depositphotos/prykhodov
