Retail clinic chain abandons 5 markets
■ Little Clinic says the closings will help streamline operations. The in-store clinic industry has grown by a net of 60 clinics in the last year.
By Pamela Lewis Dolan — Posted April 22, 2010
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The Little Clinic, a retail clinic chain owned and operated by Kroger Co., one of the nation's largest grocery operators, announced that it is leaving five markets entirely and closing an additional five clinics for a total of 30 closures.
In a statement sent to American Medical News, Little Clinic said it is leaving the Indianapolis; Houston; Toledo, Ohio; Detroit; and Richmond, Va., markets to focus "on strengthening this business model to better service the health care needs of customers in an affordable, convenient manner."
The company said it will revisit expansion plans for 2011 and beyond "once it completes the process of streamlining its operations." Meantime, it will continue to operate 117 clinics in seven states. Alday Communication, which is representing the company, declined further comment.
Tom Charland, CEO of Merchant Medicine, a Shoreview, Minn.-based retail clinic consultancy group that publishes a monthly retail clinic market report, said in his April report that Little Clinic, in its closure announcement, acknowledged for the first time that it is a wholly owned subsidiary of Cincinnati-based Kroger Co.
The Little Clinic chain got its start in 2003 when it opened at two Kroger stores in Louisville, Ky. The clinic chain was purchased in 2005 by Solera Capital, a New York-based private equity firm. In May 2008, Solera announced that Kroger had made a significant investment in the company, but the amount was not disclosed.
It's not clear when Solera pulled out and when the clinic chain became wholly owned by Kroger. But since Kroger's investment was first announced, the chain grew from 26 clinics to nearly 150, all of which were located inside Kroger grocery stores.
Charland said he believes the transfer of ownership to Kroger and the resulting change to the company's sources of operating income contributed to the recently announced closures.
In addition to Little Clinic closings, 11 other clinics nationwide closed in March, while seven new clinics opened, according to the April Merchant Medicine report.
In the past 12 months, the retail clinic market has grown by a net of 60 clinics, according to the report.
The last major decline in the market occurred in spring 2009, when MinuteClinic, the first and largest retail clinic chain, said it was shutting down 89 of its 545 locations for the summer. Although it said it planned to reopen those clinics last fall, in time for flu season, most remained closed, except for some that opened just to administer flu shots.