By the third quarter of 2004, Rite Aid was on the verge of a return to steady profitability. Net income of $22.5 million that quarter reduced the net loss for the first nine months of the year to $26.9 million. Another signal of the firm's recovery came in February 2004 when it was reported that Rite Aid had entered the bidding for the Eckerd chain, which J.C. Penney was attempting to sell. Rite Aid reportedly offered as much as $4 billion for the chain, which operated almost 2,800 stores, mostly in the East and South. Given the nascent nature of Rite Aid's recovery, analysts were doubtful that the firm's bid would prevail against competing offers from arch-rival CVS and the Jean Coutu Group Inc., a Canadian firm that owned the Brooks Pharmacy chain in the Northeast. It was nevertheless certain that Rite Aid had entered a new growth phase: In June 2003 the company announced plans to build 175 new stores in its strongest markets over the next two fiscal years. With a keen eye on controlling costs and keeping its books clean, Rite Aid was poised for a full recovery from its black days in the late 1990s.

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I remember many of us breathing a huge sigh of relief back then when JCG beat out RAD and got saddled with the Eckerd chain. Oh to be so young and foolish again. Little did we realize that JCG was just holding that bag for a while so the contents could fester a bit more before passing it on to Rite Aid.