Bartell Drugs announces it is being sold to Rite Aid on October 7, 2020.

  • By Phil Dougherty
  • Posted 10/28/2020
  • HistoryLink.org Essay 21118

On October 7, 2020, Bartell Drugs announces that it has been purchased by Rite Aid. The sale of the 130-year-old Seattle-based company brings an end to the oldest family owned drugstore chain in the country.

A Familiar Presence

In a year full of shocks both nationally and locally, it was still a big one when the news broke that Bartell Drugs was being sold to Rite Aid, a national drugstore chain. Bartell Drugs had been in business in Seattle for 130 years, beginning with George H. Bartell's Lake Washington Pharmacy on Jackson Street, and it was one of the oldest companies in the state. Though the company had endured tough times during the mid-twentieth century, it had been stable and prosperous for most of its years. Its drugstores had been a familiar, comforting presence for many in Seattle, and later its suburbs and beyond.

In 2015, Bartell Drugs celebrated its 125th anniversary with a celebrated lookback at its long and storied run in the Puget Sound region. The future seemed bright: The company had weathered the Great Recession a few years earlier, and it was continuing to slowly expand. And the first member of the fourth Bartell generation, Evelyn Barber Merrill (b. 1987), joined the company that year as a senior marketing manager. She became director of marketing in 2019.

Yet, even in 2015, there were surprises and glimpses of a less-than-certain future. In January, Bartell Drugs named a former REI executive, Brian Unmacht (b. 1960), president of the company, and in April 2015 he was named CEO. Unmacht wasn't a complete newcomer -- he had been on Bartell's board of directors since 2011 -- but he was the first member from outside of the family to serve as the company's CEO. (Former CEO George D. Bartell [b. 1951], grandson of George H. Bartell, remained chairman of the board, and his sister, Jean Bartell Barber [b. 1953], remained vice chairman and treasurer.) Unmacht resigned in March 2017, and the following January he was replaced by Kathi Lentzsch (b. 1955), a retail veteran with retail pharmaceutical experience in California.

Challenges and Successes

During the last half of the 2010s, increasing competition from online retailers continued to chip away at the company's retail sales. Profits in pharmacy also slipped as the result of lower reimbursement rates from health insurers; as a mid-sized chain, Bartell's lacked the negotiating leverage that larger companies had. Locally, both property taxes and business taxes jumped in downtown Seattle, while at the same time increasing homelessness in the city and a surge in crime in certain neighborhoods created their own challenges. The problem became so pervasive at Bartell's 3rd Avenue and Union Street store that the company closed it in late 2019.

Nevertheless, Bartell Drugs carried on as it always had. It opened stores in Seattle's International District, Green Lake, and Belltown neighborhoods, as well as in Snoqualmie Ridge 25 miles east of Seattle, and in Arlington (Skagit County), more than 40 miles north of Seattle. The locations farther from the downtown core were in keeping with the Bartell objective of gradually expanding its stores throughout the Puget Sound region as the Seattle metropolitan area similarly expanded. At its peak in 2019, when it opened its final new store in Belltown that October, Bartell Drugs had 68 stores and employed more than 1,700. The company reported more than $550 million in revenue that year.

Then it was 2020.

The End

In March, the coronavirus pandemic's full effects struck the United States. Businesses were closed, people began working from home, and what was at first thought to be a short-term setback instead because a long-term ordeal. Riots and protests in Seattle that summer added to the misery. By October, with no end to the pandemic in sight, it was becoming increasingly obvious that once it ended, life would not be the same. A number of companies had already announced plans to let their employees work part or full time from their homes permanently, which translated into less traffic downtown and less traffic for Bartell's downtown Seattle stores. It was the proverbial straw that broke the camel's back.

Though Evelyn Merrill was still at Bartell Drugs in 2020, many of the other members of the fourth Bartell generation -- still in their 20s or early 30s -- were pursuing other careers. There was not a cadre of experienced Bartell descendants waiting in the wings to take on the company's issues, and George D. Bartell and Jean Barber were both in their late 60s, an age when many were either retired or considering retirement. "We felt this (sale) was the only answer," Bartell explained in an interview with The Seattle Times ("Bartell Drugs ...").

On October 7, 2020, both Bartell Drugs and Rite Aid announced the news of the $95 million sale, which was expected to be completed in December. The Pennsylvania-based Rite Aid operated 2,400 stores in 18 states, with 69 stores in the Puget Sound region. Rite Aid was not without its own financial issues, but these took a back seat to the sunny announcements of the sale. There were plenty of assurances that the Bartell name would remain on the stores and the stores would continue to look essentially the same. No closures or layoffs were reported to be planned at the stores themselves, though Rite Aid said it planned to review jobs at Bartell's executive level for any redundancies.

"Thank you for being true, loyal customers" wrote George Bartell and Kathi Lentzsch in a customer letter posted to the Bartell blog when the sale was announced. "This transition is a celebration of that customer-focused legacy, while looking forward to a bright and successful future as a part of Rite Aid" ("A Letter…").


Sources:

"Bartell Drugs Names Unmacht as New CEO," Chain Drug Review, April 29, 2015, website accessed October 10, 2020 (https://www.chaindrugreview.com/bartell-drugs-names-unmacht-as-new-ceo/); "Kathi Lentzsch Named CEO of Bartell Drugs," Chain Drug Review, January 18, 2018, website accessed October 10, 2020 (https://www.chaindrugreview.com/49776-2); Megan Campbell, "Rite Aid Acquires Pandemic-Stricken Bartell Drugs for $95M," Puget Sound Business Journal, website accessed October 9, 2020 (https://www.bizjournals.com/seattle/news/2020/10/07/bartell-acquired-by-rite-aid-for-95m.html); Rob Smith, "Bartell Drugs Bought by Rite Aid for $95M," Seattle Business magazine, website accessed October 9, 2020 (https://www.seattlebusinessmag.com/retail/bartell-drugs-bought-rite-aid-95m); Christina Ausley, "After 130 Years, Seattle-Based Bartell Drugs Chain Sold for $95 Million," Seattle Post-Intelligencer, website accessed October 9, 2020 (https://www.seattlepi.com/lifestyle/food/slideshow/After-130-years-Seattle-based-Bartell-Drugs-sold-210454.php); Janet Tu, "Bartell Drugs CEO Resigns After Two Years as First Outsider to Run the Chain," The Seattle Times,  April 7, 2017, website accessed October 10, 2020 (https//www.seattletimes.com); Paul Roberts, "Bartell Drugs, A Local, Family-Owned Business for 130 Years, to be Sold to Rite Aid for $95 Million," Ibid., October 7, 2020, website accessed October 8, 2020 (https://www.seattletimes.com); George D. Bartell and Kathi Lentzsch, "A Letter to Our Customers," Bartell Drugs website accessed October 7, 2020 (https://www.bartelldrugs.com/blog/a-letter-to-our-customers/); "Evelyn Merrill," LinkedIn website accessed October 9, 2020 (https://www.linkedin.com/in/evelynbarber1).


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