Walgreens to Buy Out Duane Reade

Walgreens has announced that it will buy out Duane Reade holdings for $1.1 billion ($618 million for the purchase and $457 million in company debt).

Walgreens is a national pharmacy chain with 70 locations in the New York City area. Duane Reade was founded in 1960 and named after the streets Duane and Reade in Lower Manhattan. There are currently 257 Duane Reade stores in the New York area.

Walgreens expects to close the deal by the end of August. For now, Duane Reade will continue operating under its own name.

As Walgreen Chief Executive Greg Wasson explained, "Duane Reade is a compelling strategic acquisition that will immediately provide Walgreens with a leading position in the largest drugstore market in the U.S" (as reported by Wall Street Journal). Purchase of DR may also be a way for Walgreens to acquire expensive realty in Manhattan.

According to Duane Reade's official site, the two businesses will continue to operate separately for now. DR does not plan to change its immunization or Doctor on Premises walk-in programs.

I would hate for Duane Reade to become completely give up its name. Visiting a DR drug store remains one of the hallmarks of Manhattan. No matter which neighborhood you're in, you can always walk a few blocks to find a DR. I've made many quick grocery runs, emergency cold medicine runs, or magazine purchases at Duane Reade.

And for tourists getting off at Grand Central, Times Square or Penn Station, there is always a Duane Reade right around the corner to remind them that they are in New York. Being greeted by a national chain like Walgreens just wouldn't be the same.

Although both companies claim that they will continue to operate separately, it may just be a matter of time. We saw what happened to Jordan Marsh in Boston and Marshall Field's in Chicago when they were bought out by Macy's.

I'm reminded of what Meg Ryan's character asked in You've Got Mail when her Shop Around the Corner was under siege by the Fox Books chain. "Do you want to step off the subway at 72nd and Broadway and not know that you're in New York City?"

Sources:

Walgreen to Acquire Drugstore Chain Duane Reade, Wall Street Journal

Duane Reade, Official Site