Duane Reade is a chain of
drugPharmacy 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 medication....
and
convenience storeA convenience store is a small store or shop that sells items such as candy, ice-cream, soft drinks, lottery tickets, newspapers and magazines, along with a selection of processed food and perhaps some groceries. Stores that are part of gas stations may also sell motor oil, windshield washer fluid,...
s, primarily located in
New York CityNew York is the most populous city in the United States, and the center of the New York metropolitan area, which is among the most populous urban areas in the world. A leading global city, New York exerts a powerful influence over worldwide commerce, finance, culture, fashion and entertainment...
, known for its high volume small store layouts in densely populated Manhattan locations.
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, as the name implies, is a wide avenue in New York City, which runs the full length of Manhattan and continues into the Bronx. It is the oldest north-south main thoroughfare in the city, dating to the first New Amsterdam settlement. The name Broadway is the English literal translation of...
in lower
ManhattanManhattan is one of the five boroughs of New York City, located primarily on Manhattan Island at the mouth of the Hudson River.New York County, which has the same boundaries as the Borough of Manhattan , is the most densely populated county in the United States, with a 2008 population of 1,634,795...
. The Cohen family sold Duane Reade to
Bain CapitalBain Capital LLC is a Boston-based private equity firm founded in 1984 by partners from the consulting firm Bain & Company. Originally conceived as a leveraged buyout and venture capital fund, Bain Capital today manages approximately $57 billion in assets, and its strategies include private equity...
in 1992 "for a reported $230 million".
Duane Reade is a chain of
drugPharmacy 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 medication....
and
convenience storeA convenience store is a small store or shop that sells items such as candy, ice-cream, soft drinks, lottery tickets, newspapers and magazines, along with a selection of processed food and perhaps some groceries. Stores that are part of gas stations may also sell motor oil, windshield washer fluid,...
s, primarily located in
New York CityNew York is the most populous city in the United States, and the center of the New York metropolitan area, which is among the most populous urban areas in the world. A leading global city, New York exerts a powerful influence over worldwide commerce, finance, culture, fashion and entertainment...
, known for its high volume small store layouts in densely populated Manhattan locations.
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, as the name implies, is a wide avenue in New York City, which runs the full length of Manhattan and continues into the Bronx. It is the oldest north-south main thoroughfare in the city, dating to the first New Amsterdam settlement. The name Broadway is the English literal translation of...
in lower
ManhattanManhattan is one of the five boroughs of New York City, located primarily on Manhattan Island at the mouth of the Hudson River.New York County, which has the same boundaries as the Borough of Manhattan , is the most densely populated county in the United States, with a 2008 population of 1,634,795...
. The Cohen family sold Duane Reade to
Bain CapitalBain Capital LLC is a Boston-based private equity firm founded in 1984 by partners from the consulting firm Bain & Company. Originally conceived as a leveraged buyout and venture capital fund, Bain Capital today manages approximately $57 billion in assets, and its strategies include private equity...
in 1992 "for a reported $230 million". Bain Capital in 1997 then sold majority ownership of the chain to
DLJDonaldson, Lufkin & Jenrette or DLJ is a defunct U.S. investment bank founded by William H. Donaldson, Richard Jenrette and Dan Lufkin in 1959...
. Duane Reade completed its
initial public offeringAn initial public stock offering referred to simply as an "offering" or "flotation," is when a company issues common stock or shares to the public for the first time...
(IPO) on February 10, 1998, trading on the
New York Stock ExchangeThe New York Stock Exchange is a stock exchange located at 11 Wall Street in lower Manhattan, New York City, New York, USA. It is the largest stock exchange in the world by United States dollar value of its listed companies' securities...
under the
ticker symbolA 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...
DRD. On August 2, 2004, the company announced it was acquired by Oak Hill Capital Partners and taken private.
In November 2008, Duane Reade began rolling out a new logo which some consider more upscale. In April 2009, Duane Reade hired
DeVito/VerdiDeVito/Verdi is an award winning, medium-sized, full service US advertising agency based in New York City, founded in 1991 by partners Sal DeVito and Ellis Verdi. The agency serves clients across the United States in cities such as Denver, Boston, Miami, Grand Rapids, St. Louis, San Francisco and...
as its lead advertising agency.
name="Ad Week">
Ad week,
"DeVito/Verdi Takes Duane Reade", 7 April 2000, retrieved 17 June 2009
The chain
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 is a weekly magazine 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 offers less national news and more gossipy, tabloid-like stories, but has also published noteworthy articles...
in 2005. He designed each store using four sections: one for
beautyBeauty 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. As a cultural creation, beauty has been extremely commercialized...
and
cosmetic productsCosmetics 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, permanent waves, colored contact lenses, hair colors, [hair sprays] and gels,...
, another that serves as a
pharmacyPharmacy 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 medication....
, a third section for
seasonal productsSeasonal 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, July 4th, Labor Day, back-to-school, Halloween,...
such as
cardsA 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
householdThe 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 is a title held by many leaders of organizations, companies, trade unions, universities, and countries. Etymologically, a "president" is one who presides, who sits in leadership...
of
PathmarkPathmark is a supermarket chain headquartered in Montvale, New Jersey, founded in 1968 when its parent, Supermarkets General , 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 from $1.17 billion in the 2001 fiscal year to $1.47 billion in 2003, the combined impact of union disputes, a local
recessionIn economics, a recession is a general slowdown in economic activity over a long period of time, or a business cycle contraction. 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 CityNew York is the most populous city in the United States, and the center of the New York metropolitan area, which is among the most populous urban areas in the world. A leading global city, New York exerts a powerful influence over worldwide commerce, finance, culture, fashion and entertainment...
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 courtThe 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 fraudSecurities fraud, also known as stock fraud and investment fraud, is a practice in which investors 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,
COOA chief operating officer or chief operations officer is a corporate officer responsible for managing the day-to-day activities of the corporation and for operations management...
of San Francisco-area-based
Longs DrugsLongs Drugs was a pharmacy chain store located on the West Coast of the United States. It was founded in 1938 by brothers Thomas and Joseph Long , with their first store in Oakland, California...
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 JerseyNew Jersey is a state in the Mid-Atlantic region of the United States. It is bordered on the north by New York, and to the east by the Hudson River, Upper New York Bay, the Kill Van Kull, Newark Bay, the Arthur Kill, Raritan Bay, Sandy Hook Bay, Westchester County, New York City, Long Island, and...
stores that were expired or overpriced. It agreed to pay a total of $200,000 in
civil penaltiesA 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.