Dart on the Target

When a homesick G.I. longs for something "as American as the corner drugstore," the odds are five to one that the store he is thinking of is a Rexall store. And the odds are going down. Last week the United-Rexall Drug Inc., biggest in the U.S., floated a new $11,000,000 stock issue. With the proceeds, United will buy the 19-store Renfro chain in Texas (for $1,200,000), will enlarge and remodel the 541 stores it already has as well as some of the 10,000 affiliated Rexall druggists.

What United wants to do with its stores was shown fortnight ago when the first Owl "Superstore" opened its doors on Hollywood's busiest corner, Hollywood Boulevard and Vine Street. It looked like a De Mille glorification of a drugstore--indirect lighting, air-conditioning and a 56-stool counter-fountain, with endless belt to bring food from the kitchen and carry back dirty dishes.

Up with Walgreen's. A chain of such stores has been the dream of United's energetic, athletic president, Justin Whitlock Dart, 38, ever since he was started in the drug business by Charles R. Walgreen Sr., then his father-in-law. He soon proved that his job did not depend on nepotism. Over the objections of fellow executives, he busily rearranged the interiors of Walgreen drugstores, showed that it was just as important to put an article in the right place in a store as to put the right things in the manufacture of the article. Sample change: he separated soda fountains and drug counters, so that soda-sippers and sandwich-chewers wouldn't be confronted by laxative ads. (Now he buries prescription counters in the back of stores lest they take up valuable space for rag dolls, books, etc.) In 1941 United hired Dart away from Walgreen's (his wife had divorced him 2 years before), upped him to President of United later. He consolidated United's sprawling holdings, bought up its bad leases, closed down unprofitable stores, built up good will.

Independent druggists disliked the way the company sold them its own manufactured products (candy, bandages, drugs, etc.) with one hand and set up competing chain stores with another. Dart calmed the independents by closing some of his weaker competing chain stores and offering independents the benefit of United's mass purchasing power. Last week Dart carried this plan even further. He put the 10,000 independent Rexall stores, which hold exclusive franchises for United's products, on an equal footing with the company-owned chain stores. United will now help finance the expansion programs of any affiliated druggists who want to grow, hopes thus to build Dart's chain of super drugstores.

West with United. During United's period of consolidation, net earnings fell from $2,527,424 in 1941 to $1,970,971 in 1945. One big item was $580,000 spent last fall by President Dart to move United-Rexall's headquarters from Boston to Los Angeles. This move was part of the bargain he made with United: if he could move HQ west, he would stay at $75,000 a year, instead of taking the offered presidency of Montgomery Ward and Co. at $150,000. The trade gossiped that the move was dictated by Dart's second wife, movie starlet Jane Bryan. But Dart had a more hardheaded reason. He simply thinks that in Los Angeles' pleasant climate his staff would work better.

And in fact, United is doing much better. Net earnings in the first quarter of 1946 were $1,029,883 (v. $502,448 for the same period of 1945). United plans to expand still more, diversifying as it goes. As Dart puts it: "We'll buy plants in any field where it would be cheaper to manufacture ourselves than to buy on the market."

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