Revco
Encyclopedia
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.
Up to 1983, Revco grew tremendously; the chain had over 2,200 stores and over $2.2 billion dollars in sales. The chain then began to stumble. In 1983, its vitamins were blamed for the deaths of 38 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 Lots
, now known as Big Lots, a closeout retailer. Revco's management lost its focus on the drug store portion of its business due to problems with Odd Lots, 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.
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
. Several Revco locations, primarily in the Detroit, Michigan
area, were sold off to Perry Drug Stores
in 1990. Revco emerged from bankruptcy, as an independent company, in 1992.
), reduced costs, introduced computerized point-of-sale systems, and introduced a new store design to help increase sales. The chain shrunk from about 2,200 stores to about 1,500 stores during this period.
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.
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.
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...".
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.
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.
, 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 (see Factoids), 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. The race is now sponsored by Rite Aid.
Twinsburg, Ohio
As of the census of 2000, there were 17,006 people, 6,641 households, and 4,695 families residing in the city. The population density was 1,366.7 people per square mile . There were 6,871 housing units at an average density of 552.2 per square mile...
, was a major drug store chain operating through the Ohio Valley, the Mid-Atlantic
Mid-Atlantic States
The Mid-Atlantic states, also called middle Atlantic states or simply the mid Atlantic, form a region of the United States generally located between New England and the South...
states, and the Southeastern United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. The chain's stock was traded on the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
(NYSE) under the ticker
Ticker
Ticker can mean:* A stock ticker machine and the ticker tape it prints on* Ticker symbol, codes used to uniquely identify publicly traded companies on a stock market...
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 dollars in sales. The chain then began to stumble. In 1983, its vitamins were blamed for the deaths of 38 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 Lots
Big Lots
Big Lots, Inc. is a Fortune 500 retail corporation with annual revenues well over $4 billion.Its department stores focus mainly on selling closeout and overstock merchandise. The company is based in Columbus, Ohio, USA and currently operates over 1,400 stores in 47 states...
, now known as Big Lots, a closeout retailer. Revco's management lost its focus on the drug store portion of its business due to problems with Odd Lots, 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.
Bankruptcy
Leveraged buyout
A leveraged buyout occurs when an investor, typically financial sponsor, acquires a controlling interest in a company's equity and where a significant percentage of the purchase price is financed through leverage...
. 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
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
in 1988. Revco was bailed out of bankruptcy by investor Sam Zell, in part to fend off separate takeover attempts by both Eckerd
Eckerd
Eckerd Corporation was an American drug store chain that was headquartered in Largo, Florida, and toward the end of its life, in Warwick, Rhode Island....
and Rite Aid
Rite Aid
Rite Aid is a drugstore chain in the United States and a Fortune 500 company headquartered in East Pennsboro Township, Pennsylvania, near Camp Hill. Rite Aid is the largest drugstore chain on the East Coast and the third largest drugstore chain in the U.S....
. Several Revco locations, primarily in the Detroit, Michigan
Detroit, Michigan
Detroit is the major city among the primary cultural, financial, and transportation centers in the Metro Detroit area, a region of 5.2 million people. As the seat of Wayne County, the city of Detroit is the largest city in the U.S. state of Michigan and serves as a major port on the Detroit River...
area, were sold off to Perry Drug Stores
Perry Drug Stores
Perry Drug Stores was an American retail pharmacy chain founded in 1957 in the city of Pontiac, Michigan, United States. At its peak in the 1980s, Perry operated more than 200 drug stores, primarily in the state of Michigan, as well as 200 Auto Works auto parts stores and fourteen A. L...
in 1990. 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. The chain closed many underperforming stores (including closing all stores west of the Mississippi RiverMississippi River
The Mississippi River is the largest river system in North America. Flowing entirely in the United States, this river rises in western Minnesota and meanders slowly southwards for to the Mississippi River Delta at the Gulf of Mexico. With its many tributaries, the Mississippi's watershed drains...
), reduced costs, introduced computerized point-of-sale systems, and introduced a new store design to help increase sales. The chain shrunk from about 2,200 stores to about 1,500 stores during this period.
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.
Hook's Drug Stores
Hook's Drug Stores was an Indianapolis, Indiana-based drug store chain which was founded in 1900 by John A. Hook. The chain flourished throughout central Indiana for most of the 20th-century before being acquired by Revco which was in turn acquired by CVS. Many former Hook's locations are now CVS...
drug stores in 1994 in the Mid-Atlantic region and Midwest, and Birmingham, Alabama
Birmingham, Alabama
Birmingham is the largest city in Alabama. The city is the county seat of Jefferson County. According to the 2010 United States Census, Birmingham had a population of 212,237. The Birmingham-Hoover Metropolitan Area, in estimate by the U.S...
based Big B Drugs
Big B Drugs
Big B, Inc. was a Birmingham, Alabama-based drugstore chain. The company began operation in 1968 as division of Birmingham based Bruno's Supermarkets. Most of its stores were located next to a Bruno's, Food World or FoodMax. Big B also operated a discount drugstore chain called Drugs For Less...
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. In 1996, Revco entered into an agreement with Rite AidRite Aid
Rite Aid is a drugstore chain in the United States and a Fortune 500 company headquartered in East Pennsboro Township, Pennsylvania, near Camp Hill. Rite Aid is the largest drugstore chain on the East Coast and the third largest drugstore chain in the U.S....
to be bought out.. The Federal Trade Commission
Federal Trade Commission
The Federal Trade Commission is an independent agency of the United States government, established in 1914 by the Federal Trade Commission Act...
sued to stop the buyout saying that Rite Aid would become a monopoly
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
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
Richmond, Virginia
Richmond is the capital of the Commonwealth of Virginia, in the United States. It is an independent city and not part of any county. Richmond is the center of the Richmond Metropolitan Statistical Area and the Greater Richmond area...
, Virginia
Virginia
The Commonwealth of Virginia , is a U.S. state on the Atlantic Coast of the Southern United States. Virginia is nicknamed the "Old Dominion" and sometimes the "Mother of Presidents" after the eight U.S. presidents born there...
, 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
Walgreens
Walgreen Co. , doing business as Walgreens , is the largest drugstore chain in the United States of America. As of August 31st, the company operates 8,210 locations across all 50 states, the District of Columbia and Puerto Rico. Founded in Chicago, Illinois in 1901, and has since expanded...
had entered the market in the late 1990s
1990s
File:1990s decade montage.png|From left, clockwise: The Hubble Space Telescope floats in space after it was taken up in 1990; American F-16s and F-15s fly over burning oil fields and the USA Lexie in Operation Desert Storm, also known as the 1991 Gulf War; The signing of the Oslo Accords on...
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
Mary Lou Retton
Mary Lou Retton is an American gymnast and Olympic gold medalist. She was the first female gymnast from outside Eastern Europe to win the Olympic all-around title, after 14 Eastern Bloc countries boycotted the 1984 Summer Olympics in Los Angeles.-Personal life:Retton was born in Fairmont, West...
, a U.S. gymnast
Gymnast
Gymnasts are people who participate in the sports of either artistic gymnastics, trampolining, or rhythmic gymnastics.See gymnasium for the origin of the word gymnast from gymnastikos.-Female artistic:Australia...
, as an advertising spokeswoman in the 1990s, who often began commercials by saying, "And another thing...".
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
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
, 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
Public relations
Public relations is the actions of a corporation, store, government, individual, etc., in promoting goodwill between itself and the public, the community, employees, customers, etc....
. 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
TWINS
Two Wide-Angle Imaging Neutral-Atom Spectrometers are a pair of NASA instruments aboard two United States National Reconnaissance Office satellites in Molniya orbits. TWINS was designed to provide stereo images of the Earth's ring current. The first instrument, TWINS-1, was launched aboard USA-184...
that first year, the festival now attracts thousands from all over the world and makes national headlines every summer.
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 prescriptionMedical prescription
A prescription is a health-care program implemented by a physician or other medical practitioner in the form of instructions that govern the plan of care for an individual patient. Prescriptions may include orders to be performed by a patient, caretaker, nurse, pharmacist or other therapist....
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.
The Revco Marathon
Revco founded and sponsored a very popular marathon in Cleveland, OhioCleveland, Ohio
Cleveland is a city in the U.S. state of Ohio and is the county seat of Cuyahoga County, the most populous county in the state. The city is located in northeastern Ohio on the southern shore of Lake Erie, approximately west of the Pennsylvania border...
, which was often referred to among runners as "The Revco" (its full name was "The Revco Cleveland Marathon and 10K
Cleveland Marathon
The Cleveland Marathon is an annual marathon in Cleveland, Ohio. The course begins at the corner of St. Clair and 9th and participants have eight hours in which to finish the race. The first edition was held in 1978. A half marathon , and 10K, including a Corporate Team Challenge, are held...
"). The first race took place in 1976 (see Factoids), when jogging/running first became a national fitness craze. Famous Olympic athlete Jesse Owens
Jesse Owens
James Cleveland "Jesse" Owens was an American track and field athlete who specialized in the sprints and the long jump. He participated in the 1936 Summer Olympics in Berlin, Germany, where he achieved international fame by winning four gold medals: one each in the 100 meters, the 200 meters, the...
fired the starting gun at the first race, which started at Western Reserve Academy
Western Reserve Academy
Western Reserve Academy is a private, mid-sized, coeducational boarding and day college preparatory school located in Hudson, Ohio.-History:...
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
Cleveland State University
Cleveland State University is a public university located in downtown Cleveland, Ohio. It was established in 1964 when the state of Ohio assumed control of Fenn College, and it absorbed the Cleveland-Marshall College of Law in 1969...
. 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. The race is now sponsored by Rite Aid.