Revco
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| Fate | Acquired by CVS |
|---|---|
| Founded | 1956 |
| Defunct | 1997 |
| Headquarters | Twinsburg, Ohio |
| Products | Pharmacy, Cosmetics, Health and Beauty Aids, General Merchandise, Snacks, 1 Hour Photo |
Revco Discount Drug Stores (known simply as Revco or Revco, D.S.), once based in Twinsburg, Ohio, was a major drug store chain operating through the Ohio Valley, the Mid-Atlantic states, and the Southeastern United States. The chain's stock was traded on the New York Stock Exchange (NYSE) under the ticker RXR. When it was sold, the chain had over 2,500 stores.
History
Revco, originally known as Registered Vitamin Company, was founded in 1956 in Detroit, Michigan by Sidney Dworkin and Bernie Shulman. Dworkin led Revco until 1986 as CEO, and then he served as Chairman until 1987.
Up to 1983, Revco grew tremendously; the chain had over 2,200 stores and over $2.2 billion in sales. The chain then began to stumble. In 1983, its vitamins were blamed for the deaths of a number of premature infants. In order to prevent a hostile takeover and increase short-term profitability, Dworkin then led the chain into a deal that would seal its fate many years later. Under his leadership, Revco purchased a company called Odd Lot Trading Co., a closeout retailer based in New Jersey. Revco's management lost its focus on the drug store portion of its business due to problems with Odd Lot Trading Co., and earnings tumbled. The chain also began to merchandise items such as televisions, furniture, and other non-core items, and the heavy investment proved to be a failure.[1]
Bankruptcy
In 1986, Revco was the target of a leveraged buyout. Part of the buyout deal was to reduce costs by closing stores and by reducing inventory to repay debts. This left the company with a shortfall of cash, and suppliers stopped shipping inventory, causing the chain to lose customers. This eventually caused the chain to file for bankruptcy in 1988. Revco was bailed out of bankruptcy by investor Sam Zell, in part to fend off separate takeover attempts by both Eckerd and Rite Aid.[2] Several Revco locations, primarily in the Detroit, Michigan area, were sold off to Perry Drug Stores in 1990.[3] Revco emerged from bankruptcy, as an independent company, in 1992.
Emergence from Bankruptcy
Revco's turnaround from bankruptcy was and is often still considered the "model" of a business recovering from bankruptcy.[4] The chain closed many underperforming stores (including selling all stores west of the Mississippi River to the son of the then-current Rite-Aid CEO), reduced costs, introduced computerized point-of-sale systems, and introduced a new store design to help increase sales.[5] The chain shrunk from about 2,200 stores to about 1,500 stores during this period.[2]
The hallmark of the new store designs was the arrangement of the store aisles, which was developed and introduced as the company was emerging from bankruptcy. Half the store had aisles that ran from the front of the store to the back in straight rows. Seasonal merchandise, food, greeting cards, baby supplies, hardware and office supplies were in this half of the store. The other half of the store, the health and beauty sections, had their aisles slanted so customers could see down the aisles as they walked from the front doors to the pharmacy, which was in the back of the store. A very wide main aisle led from the front door to the pharmacy, and this aisle separated the slanted aisles from the "straight aisles". While many drug stores in the U.S. have variations of this design today, it was a departure at the time from the usual all front-to-back, straight aisles. In Revco's free standing stores, the slanted aisles had an open ceiling above them; the other aisles had a drop ceiling over them . In these stores today, which are now CVS stores, the open ceiling and drop ceiling are still in place (though all the aisles are now aligned in a traditional manner).
The new stores also were decorated in soft blues and greys, had track lighting, and low hanging lights over the greeting cards, all which gave the store a "soft" appearance. Revco introduced strict rules about having no handwritten signs or merchandise displays sitting directly on the floor, which it thought gave the stores a cleaner look. It also required its employees to dress extremely professionally, with men wearing ties. All front-end employees had to wear a navy blue smock.
After emerging from bankruptcy, the chain grew tremendously again, increasing its store count to over 2,500 stores. Part of this growth came from the purchase of over 800 Hook's/SupeRx drug stores in 1994 in the Mid-Atlantic region and Midwest, and Birmingham, Alabama based Big B Drugs in the southeast, which was its last purchase, made in 1996.
Sale of the company
In order to help Zell recover his investment in the company, the company's management was under pressure to sell the company.[4] In 1996, Revco entered into an agreement with Rite Aid to be bought out. The Federal Trade Commission sued to stop the buyout saying that Rite Aid would become a monopoly in many markets because Rite Aid and Revco had many overlapping stores, and Rite Aid withdrew its bid for the company.
The chain was purchased by CVS Pharmacy in June 1997, which at the time was half of Revco's size, and CVS re-branded or closed all of the 2,552 Revco stores by summer of 1998. In at least one market, Richmond, Virginia, the FTC prohibited CVS from taking over the Revco stores, stating that the company would have a near monopoly. So CVS sold the Revco stores it had bought to Eckerd. Eckerd changed most of the Richmond area Revco stores to Eckerd stores, and closed a few of them. A few others closed within a few years. Eckerd maintained its presence in the Richmond market until 2007, when it was bought out, ironically, by Rite Aid. By that time, however, Rite Aid's operations in the Richmond area did not constitute a monopoly, as Walgreens had entered the market in the late 1990s and opened many successful stores.
CEOs
- Sidney Dworkin (1961–1986)
- William Edwards (1986–1987)
- Boake Sells (1987–1992)
- D. Dwayne Hoven (1992–1997, last CEO)
Promotions and discount programs
Revco was well known for its "A Friend for Life" slogan and senior citizen's discount program, called "Senior Shoppers" (in which customers over 65 received 10% off their purchase every Wednesday). Revco also had a discount program for customers with disabilities (called "Helping Hands") and for baby supplies (called "Baby Bunch").
At the time, it was highly unusual for a chain of Revco's size to offer such discount programs, and the chain was extremely popular with customers because of these programs. Revco may have been well ahead of its time, as its discount programs resembled today's loyalty card programs used by grocery stores and CVS. Revco had customers fill out an information card with their contact information and gave them a card to identify their participation in the discount program (though Revco did not track purchases as many loyalty card programs do today).
Revco used Mary Lou Retton, a U.S. gymnast, as an advertising spokeswoman in the 1990s, who often began commercials by saying, "And another thing..." and would end them by saying, "...and now you know. Revco."
Ironically, Rite Aid now offers a similar discount program to "Senior Shoppers", called "Living More". This may be attributed to the fact that Rite-Aid's James P. Mastrian, who is the Executive Vice President of Marketing, held the same position at Revco from 1994 to 1997.
Twins Days, a festival honoring the twin brothers who founded the city of Twinsburg, was the brainchild of Charles R. DeHaven, then Revco's Assistant Vice President of Public Relations. DeHaven planned a number of promotional events in 1976 (see Revco Marathon) to commemorate the nation's Bicentennnial. From the small gathering of 37 sets of twins that first year, the festival now attracts thousands from all over the world and makes national headlines every summer.[6]
Prescription Access Link
Revco was one of the first drug store chains in the country to have a centralized pharmacy computer system, which it called Prescription Access Link (PAL). This system allowed each Revco access to any other Revco's prescription information. It highly advertised this system to customers, which allowed a customer to go any Revco to have their prescription refilled without the stores having to call each other on the phone. While this type of system is the norm in drug stores today, it was revolutionary when Revco used it. PAL was introduced to Revco stores during its emergence from bankruptcy.[5]
In popular culture
The Revco Marathon
Revco founded and sponsored a very popular marathon in Cleveland, Ohio, which was often referred to among runners as "The Revco" (its full name was "The Revco Cleveland Marathon and 10K"). The first race took place in 1976, when jogging/running first became a national fitness craze. Famous Olympic athlete Jesse Owens fired the starting gun at the first race, which started at Western Reserve Academy in Hudson, Ohio, wound its way up Rt. 91 north through Twinsburg and Solon, and eventually ended in Cleveland. This particularly grueling course was changed in later years to begin and end at Cleveland State University. Many famous runners participated over the years, as "The Revco" became an Olympic qualifying event. After CVS bought Revco, the race became known as the "CVS Marathon and 10K" before CVS dropped its sponsorship in the early 2000s (decade). The race is now sponsored by Rite Aid.
Slap Shot
Revco is one of a number of now-defunct retailers shown in the background of fictional downtown Charlestown in the 1977 movie Slap Shot, which was filmed in Johnstown, Pennsylvania. Other retailers shown in the background that have since gone out of business include Woolworth (who still exists today as Foot Locker but closed their namesake chain in 1997) and competitor Thrift Drug (which was later merged into Eckerd Pharmacy after Thrift Drug's then-parent J. C. Penney acquired the much larger Eckerd chain). Also shown was a location of Thrift Drug's nominal successor (through Eckerd) and fellow Pennsylvania pharmacy, Rite Aid, who themselves nearly bought out Revco.
References
Footnotes
- ↑ Revco D.S., Inc.: Information and Much More from Answers.com
- 1 2 "Streamlined Revco struggles to emerge from bankruptcy". Drug Store News. 1991.
- ↑ Frederick, James (1990-06-23). "Perry Drug snaps up 24 more Mich. Revcos". Drug Store News. Retrieved 2007-11-27.
- 1 2 Frederick, James (1996). "Revco". Drug Store News.
- 1 2 Griffin, Marie (1995). "POS speeds into stores". Drug Store News.
- ↑ The History and Views of Twins Days
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