Duane Reade

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Duane Reade is a chain of ubiquitous drugstores/convenience stores, primarily located in New York City.

1 History
2 Expansion
3 Criticism
4 External links

[edit] History

The store was founded in 1959 on Broadway between Duane and Reade Streets in lower Manhattan in the vicinity of City Hall. Duane Reade completed its initial public offering (IPO) on February 10, 1998. It traded on the New York Stock Exchange under the ticker symbol DRD until August 2, 2004, when it was acquired by Oak Hill Capital Partners and taken private.

[edit] Expansion

The chain has greatly expanded in recent years, growing from 67 stores in 1997 to 241 stores at the end of 2003. Sales for the 2003 fiscal year totaled $1.4 billion. Almost all of the stores are in New York City or in the immediate suburbs. The chain is famous for fitting its stores into awkwardly shaped locations, meaning that many locations are multiple levels with odd layouts. In 2005 the chain lost $100 million, attributed to lack of customer service, lax standards, poor management, litigation, and a large CEO retirement package.

Richard W. Dreiling, President and Chief Executive Officer, commented, "In March 2006 we announced Duane Reade Full Potential, our six point strategic plan designed to transform and improve the business, and strengthened our management team. I am pleased to report that we are off to a solid start on what promises to be an exciting phase of the Company's path to sales growth and improved profitability. During the first quarter, we continued to realize strong growth in front-end same-store sales driven by improvements across nearly all merchandise categories. On a sequential basis, we generated an improvement in Adjusted FIFO EBITDA that is consistent with our previously provided guidance, and our working capital and cash flow initiatives were in line with our plan.

"It is important to note that while we are making solid progress, we view 2006 as a transitional year during which many operational improvements will be made to the business. To that end, we expect it to take time for these changes to significantly impact our financial results, and therefore, we do not anticipate a straight line to the top."

[edit] Criticism

Duane Reade has also been accused of encroachment (overly aggressive expansion, in which one Duane Reade is so close to another that they end up competing); this is evident in various neighborhoods where there are 3-5 Duane Reades within 3 city blocks of each other. This has become somewhat of a local joke to New Yorkers, many of whom find the whole situation ridiculous.

Duane Reade's embattled CEO Anthony Cuti was replaced in November 2005, by Richard Dreiling COO of San Francisco-area-based Longs Drugs stores and an industry veteran.

Two labor unions and Duane Reade Holdings Inc. struck a deal April 11th 2006 to close a five-year contract dispute at 141 drug stores, including 13 on Long Island. The three-year deal covers more than 2,600 clerks, cashiers, pharmacy clerks, pharmacy technicians and photo technicians at stores in New York City and Long Island, and it brings to a close a labor dispute that dates from 2001, when the 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.

After nearly 5 years, Duane Reade finally agreed to settle with Disabled In Action, and it's hoped that the settlement, the first of its kind in New York, will provide a blueprint for other large retail stores, here and across the US. Duane Reade pledged to make all of its stores ADA compliant in the next two years.