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Would you believe that Walgreens bought Duane Reade in part because it was attracted to Duane Reade's stellar management? That's the picture Andrew Ross Sorkin paints in yesterday's Dealbook column, where he follows Duane Reade from a local business founded in 1960 by a pair of brothers to the behemoth we know today. In 1992, the brothers cashed out, and in 1998 new owners took the company public to capitalize on the dot-com boom. Oak Hill bought Duane Reade in 2004 and took it private again, and that's when the trouble started.
"By 2006, the business was hemorrhaging money," writes Sorkin, "and a series of scathing articles called Duane Reade a 'zombie: dead, but walking among the living,' as BusinessWeek put it." So Oak Hill began frantically trying to fix its stores, an effort we as customers witnessed in the brand's many makeovers and new initiatives of the past year. And miraculously, it worked—so well, in fact, that Walgreen would like to learn from its example.
Sorkin writes that Walgreen Co. bought Duane Reade not just to get market share, but also to take "advantage of its operational excellence." Operational excellence. Duane Reade. And it gets even stranger: Sorkin predicts that Walgreens will want to use Duane Reade's management techniques to improve Walgreens in other urban areas. Get ready, rest of America: Duane Reade is coming for you.
· Duane Reade and Its Road to Health [NYT]
· Walgreens to Take Over New York's Finest Drugstore Chain [Racked NY]