- Duane Reade
-
Duane Reade Inc. 
Type Private (subsidiary of Walgreens) Industry Retail
PharmacyFounded New York City, NY, U.S. (1960) Founder(s) Abraham Cohen
Eli Cohen
Jack CohenHeadquarters New York City, NY, U.S. Area served Nationwide Key people John A. Lederer,
Chairman and CEORevenue 
1.58 billion USD
(2006 fiscal year)Parent Walgreen Company Website www.duanereade.com 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.[1]
Contents
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 Broadway in Lower Manhattan.[2]
The Cohen family sold Duane Reade to Bain Capital in 1992[3] "for a reported $239 million".[4] Bain Capital in 1997 then sold majority ownership of the chain to DLJ.[5]
Duane Reade completed its initial public offering (IPO) on February 10, 1998, trading on the New York Stock Exchange under the ticker symbol DRD.[6] On August 2, 2004, the company announced it was acquired by Oak Hill Capital Partners and was again a private company.[7]
In November 2008, Duane Reade began rolling out a new logo.[citation needed] In April 2009, Duane Reade hired DeVito/Verdi as its lead advertising agency.[8]
On April 9, 2010, Duane Reade was acquired by the Walgreen Company for $623 million.
A shopper in an aisle at a Duane Reade store in Penn Station
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 magazine 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."[2]
Expansion
Under CEO Anthony Cuti, who was previously president 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.[2] 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.[9]
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.[2] 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.[10] Almost all of its stores are located in New York City 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 for falsely reporting company income and conspiring to commit securities fraud from December 2000 to June 2005.[11] Cuti had already been replaced in November 2005 by industry veteran Richard Dreiling, COO of San Francisco-area-based Longs Drugs stores.[12]
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.[13]
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.[14]
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. [15][16]
References
- Notes
- ^ "address.gif." Duane Reade. Retrieved on December 22, 2010. "Duane Reade Inc. 440 Ninth Ave New York, NY 10001."
- ^ a b c d Mount, Ian (2005-05-29) "The Mystery of Duane Reade". nymag.com. Retrieved July 3, 2007. Duane Reade takes its name from the Company's first successful full-service drugstore, which opened in 1960 on Broadway between Duane and Reade Streets in Manhattan. "Founded in 1960 by the brothers Abraham, Eli, and Jack Cohen, Duane Reade started as a three-store health-and-beauty chain that took the name of the two streets that bounded its lower-Broadway warehouse."
- ^ "Duane Reade sold to investment group". Chain Drug Review. New York: Racher Press, Inc.. 1992-07-13. http://findarticles.com/p/articles/mi_hb3007/is_n19_v14/ai_n28617449. Retrieved 2008-10-10.
- ^ "July: family-owned Duane Reade is sold; F&M files with SEC for public offering". Chain Drug Review. New York: Racher Press, Inc.. 1993-04-26. http://findarticles.com/p/articles/mi_hb3007/is_n13_v15/ai_n28623833. Retrieved 2008-10-10.
- ^ Parks, Liz (1997-10-20). "Cuti leads Duane Reade in strong comeback". Drug Store News. New York. http://findarticles.com/p/articles/mi_m3374/is_n17_v19/ai_19938203. Retrieved 2008-10-10.
- ^ Wirth, Gregg (1998-02-10). "Dow's Rising Tide Lifts IPO's Boats". TheStreet.com, Inc. http://www.thestreet.com/story/12091/1/dows-rising-tide-lifts-ipos-boats.html. Retrieved 2008-10-10.
- ^ "Duane Reade Inc. to Go-Private Merger Consummated.". 2004-08-02. http://sec.gov/Archives/edgar/data/895364/000095014204002802/ex99-1form8k_080204.txt. Retrieved 2008-10-10.
- ^ Ad week, "DeVito/Verdi Takes Duane Reade", 7 April 2000, retrieved 17 June 2009
- ^ "Company News; Duane Reade Agrees To Acquire Rock Bottom Stores". The New York Times. 1998-08-06. http://query.nytimes.com/gst/fullpage.html?res=9B05E7DB123BF935A3575BC0A96E958260. Retrieved 2008-10-11.
- ^ Cordova, Elisabeth Butler (2008-10-09). "Two former Duane Reade executives indicted". New York: Crain Communications Inc.. http://www.crainsnewyork.com/apps/pbcs.dll/article?AID=/20081009/FREE/810099985/1061. Retrieved 2008-10-11.
- ^ Dienst, Jonathan (2008-10-09). "Former Duane Reade Executives Accused Of Securities Fraud". WNBC.com. http://www.wnbc.com/investigations/17681805/detail.html. Retrieved 2008-10-10.
- ^ "Richard Dreiling Appointed President and CEO of Duane Reade, Inc.". New York: PR Newswire Association LLC.. 2005-11-21. http://sev.prnewswire.com/retail/20051121/NYM15521112005-1.html. Retrieved 2008-10-10.
- ^ "Labor dispute at Duane Reade finally comes to an end". Chain Drug Review. New York: Racher Press, Inc.. 2006-05-01. http://findarticles.com/p/articles/mi_hb3007/is_8_28/ai_n29261075. Retrieved 2008-10-10.
- ^ "Duane Reade pays to settle consumer case". Hackensack, New Jersey: The Record. 2007-11-20. http://www.tradingmarkets.com/.site/news/Stock%20News/846695/. Retrieved 2008-10-10.
- ^ William Tennant Avoids Prison in Duane Reade Fraud Case, by Reuters, 7 September 2011 New York Times Kindle Edition
- ^ http://www.huffingtonpost.com/2010/06/09/duane-reade-ceo-cfo-guilt_n_605729.html
External links
Categories:- Companies based in New York City
- Companies established in 1960
- Pharmacies of the United States
- Private equity portfolio companies
- Privately held companies based in New York
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