Duane Reade
Encyclopedia
Duane Reade Inc., a subsidiary of the Walgreen Company
, is a chain of pharmacy
and convenience
stores, primarily located in New York City
, known for its high volume small store layouts in densely populated Manhattan locations. The headquarters is located along Ninth Avenue in Midtown Manhattan
.
in Lower Manhattan
.
The Cohen family sold Duane Reade to Bain Capital
in 1992 "for a reported $239 million". Bain Capital in 1997 then sold majority ownership of the chain to DLJ
.
Duane Reade completed its initial public offering
(IPO) on February 10, 1998, trading on the New York Stock Exchange
under the ticker symbol
DRD. On August 2, 2004, the company announced it was acquired by Oak Hill Capital Partners and was again a private company.
In November 2008, Duane Reade began rolling out a new logo. In April 2009, Duane Reade hired DeVito/Verdi
as its lead advertising agency.
On April 9, 2010, Duane Reade was acquired by the Walgreen Company
for $623 million.
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in 2005. He designed each store using four sections: one for beauty
and cosmetic products
, another that serves as a pharmacy
, a third section for seasonal products
such as cards
and candy, and a fourth for household
and grocery items. Cosmetic items were placed near store entrances, pharmacy sections were moved to the rear of stores since—according to Charboneau—"people don’t browse for prescriptions", and the other two sections occupied remaining space. As Ian Mount wrote in the magazine article, "half of Duane Reade’s sales come from food, cosmetics, and the like."
of Pathmark
, the store expanded from 59 stores in 1996 to 249 stores in May 2005, with more stores in New York City than any other drugstore chain. In 1998, Duane Reade acquired Rock Bottom Stores Inc, another drug retail chain, for $61 million and an additional $30 million for the 38 stores which were converted.
While sales for Duane Reade rose from $1.17 billion in the 2001 fiscal year to $1.47 billion in 2003, the combined impact of union disputes, a local recession
, and the destruction of their best-performing store in the September 11 attacks forced the company to slow its expansion from 30 new stores a year in 2001 and 2002 to no more than 17 a year in 2003 and 2004. Despite its expansion, the company had long-term debts of $405 million by October 2008, losing $33.1 million in the first half of that year. Almost all of its stores are located in New York City
or the immediate suburbs.
Its embattled CEO Cuti, along with former CFO William Tennant, were indicted on October 9, 2008 in Manhattan federal court
for falsely reporting company income and conspiring to commit securities fraud
from December 2000 to June 2005. Cuti had already been replaced in November 2005 by industry veteran Richard Dreiling, COO
of San Francisco-area-based Longs Drugs
stores.
Two unions and Duane Reade Inc. struck a deal on April 11, 2006 to close a five-year contract dispute. The three-year deal covers "all of Duane Reade's clerks, cashiers, pharmacy clerks, pharmacy technicians, and photo technicians", and it closes a dispute dating from September 2001, when their previous contract expired. As part of the deal, Duane Reade and the unions settled all outstanding union and company claims before the National Labor Relations Board
.
In November 1997, the company settled charges that it sold drugs and other products in its New Jersey
stores that were expired or overpriced. It agreed to pay a total of $200,000 in civil penalties
, investigative costs, and fees, and to comply with the state's laws and regulations, but did not admit wrongdoing.
In June 2010, former Duane Reade Chief Executive Officer Anthony Cuti and Chief Financial Officer William Tennant were convicted of securities fraud occurring between November 2000 and June 2005. They are facing up to 20 years in prison. Cuti was to be sentenced on November 15, 2010, to three years in prison. Tennant was sentenced in September 2011 to time served, supervised release for three years and a $10,000 fine.
Walgreens
Walgreen Co. , doing business as Walgreens , is the largest drugstore chain in the United States of America. As of August 31st, the company operates 8,210 locations across all 50 states, the District of Columbia and Puerto Rico. Founded in Chicago, Illinois in 1901, and has since expanded...
, is a chain of pharmacy
Pharmacy
Pharmacy is the health profession that links the health sciences with the chemical sciences and it is charged with ensuring the safe and effective use of pharmaceutical drugs...
and convenience
Convenience store
A convenience store, corner store, corner shop, commonly called a bodega in Spanish-speaking areas of the United States, is a small store or shop in a built up area that stocks a range of everyday items such as groceries, toiletries, alcoholic and soft drinks, and may also offer money order and...
stores, primarily located in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
, known for its high volume small store layouts in densely populated Manhattan locations. The headquarters is located along Ninth Avenue in Midtown Manhattan
Midtown Manhattan
Midtown Manhattan, or simply Midtown, is an area of Manhattan, New York City home to world-famous commercial zones such as Rockefeller Center, Broadway, and Times Square...
.
History
Founded in 1960, the chain was started with three stores by Abraham, Eli, and Jack Cohen, with a warehouse located between the Duane and Reade streets on BroadwayBroadway (New York City)
Broadway is a prominent avenue in New York City, United States, which runs through the full length of the borough of Manhattan and continues northward through the Bronx borough before terminating in Westchester County, New York. It is the oldest north–south main thoroughfare in the city, dating to...
in Lower Manhattan
Lower Manhattan
Lower Manhattan is the southernmost part of the island of Manhattan, the main island and center of business and government of the City of New York...
.
The Cohen family sold Duane Reade to Bain Capital
Bain Capital
Bain Capital LLC is a Boston-based private equity firm founded in 1984 by partners from the consulting firm Bain & Company. Originally conceived as an early-stage, growth-oriented investment fund, Bain Capital today manages approximately $65 billion in assets, and its strategies include private...
in 1992 "for a reported $239 million". Bain Capital in 1997 then sold majority ownership of the chain to DLJ
Donaldson, Lufkin & Jenrette
Donaldson, Lufkin & Jenrette or DLJ is a defunct U.S. investment bank founded by William H. Donaldson, Richard Jenrette and Dan Lufkin in 1959. Its businesses included securities underwriting; sales and trading; investment and merchant banking; financial advisory services; investment research;...
.
Duane Reade completed its initial public offering
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
(IPO) on February 10, 1998, trading on the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
under the ticker symbol
Ticker symbol
A stock symbol or ticker symbol is a short abbreviation used to uniquely identify publicly traded shares of a particular stock on a particular stock market. A stock symbol may consist of letters, numbers or a combination of both. "Ticker symbol" refers to the symbols that were printed on the ticker...
DRD. On August 2, 2004, the company announced it was acquired by Oak Hill Capital Partners and was again a private company.
In November 2008, Duane Reade began rolling out a new logo. In April 2009, Duane Reade hired DeVito/Verdi
DeVito/Verdi
-External links:* * * , Adweek* , Reuters* , Adweek* , Adweek* , Adweek* , Adweek* , Business Wire* , American Association of Advertising Agencies* , Reuters...
as its lead advertising agency.
On April 9, 2010, Duane Reade was acquired by the Walgreen Company
Walgreens
Walgreen Co. , doing business as Walgreens , is the largest drugstore chain in the United States of America. As of August 31st, the company operates 8,210 locations across all 50 states, the District of Columbia and Puerto Rico. Founded in Chicago, Illinois in 1901, and has since expanded...
for $623 million.
Store offerings and layouts
Gary Charboneau, the company's senior vice-president of sales and marketing since 1993, explained his store layout strategy in New York magazineNew York (magazine)
New York is a weekly magazine principally concerned with the life, culture, politics, and style of New York City. Founded by Milton Glaser and Clay Felker in 1968 as a competitor to The New Yorker, it was brasher and less polite than that magazine, and established itself as a cradle of New...
in 2005. He designed each store using four sections: one for beauty
Beauty
Beauty is a characteristic of a person, animal, place, object, or idea that provides a perceptual experience of pleasure, meaning, or satisfaction. Beauty is studied as part of aesthetics, sociology, social psychology, and culture...
and cosmetic products
Cosmetics
Cosmetics are substances used to enhance the appearance or odor of the human body. Cosmetics include skin-care creams, lotions, powders, perfumes, lipsticks, fingernail and toe nail polish, eye and facial makeup, towelettes, permanent waves, colored contact lenses, hair colors, hair sprays and...
, another that serves as a pharmacy
Pharmacy
Pharmacy is the health profession that links the health sciences with the chemical sciences and it is charged with ensuring the safe and effective use of pharmaceutical drugs...
, a third section for seasonal products
Seasonal packaging
Seasonal packaging is a way of marketing a product and sparking sales in consumer segments that infrequently buys the product by wrapping the product in a package closlely related to seasons such as Valentine's Day, Easter, Mother's Day, Memorial Day, the Fourth of July, Labor Day, back-to-school,...
such as cards
Greeting card
A greeting card is an illustrated, folded card featuring an expression of friendship or other sentiment. Although greeting cards are usually given on special occasions such as birthdays, Christmas or other holidays, they are also sent to convey thanks or express other feeling. Greeting cards,...
and candy, and a fourth for household
Household
The household is "the basic residential unit in which economic production, consumption, inheritance, child rearing, and shelter are organized and carried out"; [the household] "may or may not be synonymous with family"....
and grocery items. Cosmetic items were placed near store entrances, pharmacy sections were moved to the rear of stores since—according to Charboneau—"people don’t browse for prescriptions", and the other two sections occupied remaining space. As Ian Mount wrote in the magazine article, "half of Duane Reade’s sales come from food, cosmetics, and the like."
Expansion
Under CEO Anthony Cuti, who was previously presidentPresident
A president is a leader of an organization, company, trade union, university, or country.Etymologically, a president is one who presides, who sits in leadership...
of Pathmark
Pathmark
Pathmark is a supermarket chain headquartered in Montvale, New Jersey. It was founded in 1968 when its then parent, Supermarkets General Corporation, pulled out of the ShopRite retailers' cooperative...
, the store expanded from 59 stores in 1996 to 249 stores in May 2005, with more stores in New York City than any other drugstore chain. In 1998, Duane Reade acquired Rock Bottom Stores Inc, another drug retail chain, for $61 million and an additional $30 million for the 38 stores which were converted.
While sales for Duane Reade rose from $1.17 billion in the 2001 fiscal year to $1.47 billion in 2003, the combined impact of union disputes, a local recession
Recession
In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way...
, and the destruction of their best-performing store in the September 11 attacks forced the company to slow its expansion from 30 new stores a year in 2001 and 2002 to no more than 17 a year in 2003 and 2004. Despite its expansion, the company had long-term debts of $405 million by October 2008, losing $33.1 million in the first half of that year. Almost all of its stores are located in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
or the immediate suburbs.
Litigation and disputes
Duane Reade and its executives have been involved in various disputes with federal and local governments and labor unions over its business practices.Its embattled CEO Cuti, along with former CFO William Tennant, were indicted on October 9, 2008 in Manhattan federal court
United States District Court for the Southern District of New York
The United States District Court for the Southern District of New York is a federal district court. Appeals from the Southern District of New York are taken to the United States Court of Appeals for the Second Circuit The United States District Court for the Southern District of New York (in case...
for falsely reporting company income and conspiring to commit securities fraud
Securities fraud
Securities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws....
from December 2000 to June 2005. Cuti had already been replaced in November 2005 by industry veteran Richard Dreiling, COO
Chief operating officer
A Chief Operating Officer or Director of Operations can be one of the highest-ranking executives in an organization and comprises part of the "C-Suite"...
of San Francisco-area-based Longs Drugs
Longs Drugs
Longs Drugs is an American chain of over 40 drug stores throughout the State of Hawaii. Before being acquired by CVS Caremark in 2008, it was a chain of over 500 stores, located primarily on the West Coast of the United States...
stores.
Two unions and Duane Reade Inc. struck a deal on April 11, 2006 to close a five-year contract dispute. The three-year deal covers "all of Duane Reade's clerks, cashiers, pharmacy clerks, pharmacy technicians, and photo technicians", and it closes a dispute dating from September 2001, when their previous contract expired. As part of the deal, Duane Reade and the unions settled all outstanding union and company claims before the National Labor Relations Board
National Labor Relations Board
The National Labor Relations Board is an independent agency of the United States government charged with conducting elections for labor union representation and with investigating and remedying unfair labor practices. Unfair labor practices may involve union-related situations or instances of...
.
In November 1997, the company settled charges that it sold drugs and other products in its New Jersey
New Jersey
New Jersey is a state in the Northeastern and Middle Atlantic regions of the United States. , its population was 8,791,894. It is bordered on the north and east by the state of New York, on the southeast and south by the Atlantic Ocean, on the west by Pennsylvania and on the southwest by Delaware...
stores that were expired or overpriced. It agreed to pay a total of $200,000 in civil penalties
Civil penalty
A civil penalty or civil fine is a term used to describe when a state entity, government agency, or private party seeks monetary relief against an individual as restitution for wrongdoing by the individual. The wrongdoing is typically defined by a codification of legislation, regulations, and decrees...
, investigative costs, and fees, and to comply with the state's laws and regulations, but did not admit wrongdoing.
In June 2010, former Duane Reade Chief Executive Officer Anthony Cuti and Chief Financial Officer William Tennant were convicted of securities fraud occurring between November 2000 and June 2005. They are facing up to 20 years in prison. Cuti was to be sentenced on November 15, 2010, to three years in prison. Tennant was sentenced in September 2011 to time served, supervised release for three years and a $10,000 fine.