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EXHIBIT 99.1
[HEALTHCENTRAL LOGO]
HealthCentral.com Agrees to Acquire DrugEmporium.com
Emeryville, Calif. - July 25, 2000 - HealthCentral.com (Nasdaq: HCEN), a leading
online provider of healthcare e-commerce and content, has agreed to acquire the
assets of DrugEmporium.com, the Internet subsidiary of Drug Emporium, Inc.
(Nasdaq: DEMP). DrugEmporium.com is a full-service online drugstore and
pharmacy licensed to fill prescriptions in all 50 states, offering round-the-
clock e-mail access to its pharmacists. Last week, Gomez(TM), the Internet
rating and review authority, ranked the DrugEmporium.com website as the #1
Internet prescription site.
Under the terms of the deal, Drug Emporium, Inc. will receive preferred stock
from HealthCentral.com convertible into 2.4 million common shares, and the
opportunity to earn additional amounts of convertible preferred stock if certain
revenue targets from additional sources of revenue are met. HealthCentral.com
will assume certain liabilities of DrugEmporium.com, primarily made up of
certain trade accounts payable and certain hardware/software leases. Assets
acquired by HealthCentral.com include the DrugEmporium.com website with all
related software and hardware, a leased 60,000 square foot distribution center
and automated prescription fulfillment center, located in Louisville, Kentucky,
and at least $3 million in inventory. The closing of the transaction, which is
subject to compliance with applicable regulation requirements, is expected to
occur before the end of the third quarter.
HealthCentral also will sign a 10-year Services Agreement with the parent
company of DrugEmporium.com, Drug Emporium, Inc., which owns, operates or
franchises 177 brick-and-mortar drugstores. This Services Agreement includes
in-store promotional
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support at Drug Emporium's retail stores, inclusion of HealthCentral.com in Drug
Emporium advertising materials, the option of in-store customer pick-up of
prescriptions and other over-the-counter products ordered via HealthCentral.com
e-commerce sites, access to the Drug Emporium electronic purchasing system, and
the opportunity to take advantage of other synergies with Drug Emporium, Inc.
HealthCentral.com expects that this acquisition will accelerate its path to
profitability by reducing its cash burn. Management believes that the group
purchasing power of Drug Emporium will result in lower product costs, in
addition to other cost-reducing synergies.
DrugEmporium.com was the first online drugstore when it debuted in 1997. The
company currently sells more than 25,000 items, including prescription and non-
prescription medications, nutrition and wellness products, cosmetics, health and
beauty items, and household necessities. Gomez(TM) has recognized the
DrugEmporium.com pharmacy as the #1 Internet prescription site, with top ratings
in the important Ease of Use and Customer Confidence categories.
"We are very pleased to add to HealthCentral.com's network this top-ranking
Internet business with its exceptional customer service and a first rate
website," commented Albert L. Greene, HealthCentral.com's President and CEO.
"DrugEmporium.com is an excellent fit with our current businesses. This
acquisition should strengthen our position in the drugstore area and give us
tremendous distribution capacity that helps us consolidate our current
operations."
DrugEmporium.com has grown rapidly since its relaunch in August 1999. The
company recently reported sales of $1.2 million for the quarter ending May 27,
2000, a 32% increase over the previous quarter. Prescription orders nearly
tripled during the same period, which was the first full quarter of operation
for the new, state-of-the-art DrugEmporium.com pharmacy fulfillment center in
Louisville, Kentucky being acquired by HealthCentral.com.
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"This will allow us to consolidate our shipping into one location licensed to
fill prescriptions in all 50 states. Drug Emporium has a superior software
system already in place. It is a great advantage to have our own facility. Not
only will we be able to give our current customers better service, but we can
leverage the buying power of Drug Emporium," said Fred Toney, Executive Vice
President and Chief Financial Officer of HealthCentral.com.
"This is a very positive development for both our customers and shareholders
given recent market conditions," said David Kriegel, Chairman and Chief
Executive Officer of Drug Emporium, Inc. "The ongoing relationship between
HealthCentral.com and Drug Emporium will continue to position our company as an
industry leader and pioneer. Furthermore, this deal will allow Drug Emporium,
Inc. to maintain an online presence while refocusing our efforts on our brick
and mortar business."
"I am very enthusiastic about this transaction," said Henry Loubet, Vice
Chairman and acting Chief Operating Officer for DrugEmporium.com. "Our
strengths will complement those of HealthCentral.com, yielding a dynamic company
that will be a major player in the online health and wellness business."
"We are creating an online Health Superstore," continued Greene.
"HealthCentral's e-commerce group will now include DrugEmporium.com,
HealthCentralRx.com, Vitamins.com and the Dr. Dean Edell Eyewear product line.
We offer our customers far more selection than the traditional corner drug store
because they can choose from more than 37,000 products, including prescription
drugs, vitamins, minerals, supplements, reading glasses, over the counter
medications, toiletries, cosmetics, health and beauty items and alternative
wellness products. This robust ecommerce network is enhanced by our family of
health content and information websites as well as the referral business from
our growing institutional customer base."
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About HealthCentral.com
HealthCentral.com (Nasdaq: HCEN) is a leading provider of online healthcare e-
commerce and content to consumers through the HealthCentral.com network, which
includes HealthCentral.com, Vitamins.com, HealthCentralRx.com and RxList.com.
This network of information services provides consumers with highly personalized
interactive tools, including topical newsletters, personalized health
information pages and personalized health risk assessments. HealthCentral.com's
online drug store, HealthCentralRx.com, has more than 37,000 SKUs of health-
related products. HealthCentral.com also acts as an applications service
provider by designing, hosting and maintaining co-branded or private label
content and e-commerce Web sites for hospitals and other health organizations.
HealthCentral.com recently acquired Vitamins.com, a leading e-commerce provider
of vitamins, minerals and supplements.
About DrugEmporium.com
DrugEmporium.com is a subsidiary of Drug Emporium, Inc (Nasdaq: DEMP).
DrugEmporium.com is headquartered in Columbus, Ohio, and Drug Emporium, Inc. in
Powell, OH. DrugEmporium.com is a licensed to fill prescriptions in all 50
states and offers 24 hours a day, 7 days a week email access to pharmacists.
Drug Emporium, Inc. owns and operates 135 brick-and-mortar stores under the
names Drug Emporium, F&M Super Drug Stores and Vix Drug Stores. The company
also franchises an additional 42 stores under the Drug Emporium name.
Forward Looking Statements
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Except for historical information, the statements in this news release are
forward-looking statements, involving risks and uncertainties that could cause
actual results to differ materially from those in such forward-looking
statements. Potential risks and uncertainties include, but are not limited to,
the Company's limited operating history and need to generate revenues, the
substantial competition in the ehealth market, possible liability related to
content on or accessed through the Company's Web sites, the need to build a
brand name quickly, the effect of substantial and changing government
regulation, possible systems interruptions, a failure to integrate acquisitions
or manage growth, and a failure to attract and retain key employees. Further
information regarding these and other
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risks is included in HealthCentral.com's Form 10-KA for the year ended December
31, 1999, filed on March 10, 2000.
For Information, Contact:
HealthCentral.com
Robin Raborn
Director of Investor Relations
HealthCentral.com
Phone: 510-250-3852
[email protected]
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www.ir.healthcentral.com
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DrugEmporium.com
Mark A. Pine
Director, Public Relations and Public Affairs
(614) 341-2896 (phone)
(614) 221-7480 (fax)
[email protected]
www.DrugEmporium.com
Media Contact:
Fiona Hughes
Bairey & Bedford Public Relations
Phone: 925-672-9547
[email protected]
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