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Bartell Drugs declines a buyout offer from the Louis Liggett Company on November 12, 1925.
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On November 12, 1925, George Bartell Sr. (1868-1956) announces that Bartell Drugs has declined an offer of approximately $1 million (nearly $13 million in 2011 dollars) to purchase Bartell’s 10 drug stores from the Louis Liggett Company, a large drug store chain. Bartell explains that he has declined the offer because Bartell Drugs is proud to be a Seattle institution and intends to stay that way.
A Tempting Offer
George Bartell Sr. opened his first drug store in Seattle in 1890 and slowly grew his business over the next 30 years. By 1920 he had five stores in Seattle and had established a solid reputation in the city. His pace of store openings accelerated in the 1920s. Between 1920 and the autumn of 1925 Bartell Drugs opened five more stores, and would add another five before the end of the decade. Bartell was clearly on to something.
This entrepreneurship attracted the attention of the Louis Liggett Company, a subsidiary of the United Drug Company. Incorporated in 1902, the United Drug Company had become a behemoth in the drug store field by 1925. Its Liggett subsidiary alone had more than a thousand stores in the United States, Canada, and England. A United Drug franchise, Rexall, was even larger and better known. In 1925 Liggett’s began an aggressive buyout campaign of drug companies on the West Coast, and in September approached George Bartell with a buyout offer for his 10 stores in Seattle.
Bartell did not dismiss the offer right away. In October he traveled to New York City for an unrelated meeting, and while he was there met with representatives of the United Drug Company on October 15. They increased the offer to approximately $1 million. Bartell didn’t disclose the exact figure when he was later interviewed about the offer, but he did allow that it was a big one: “It was such a big figure, it made me feel sort of sick” (Seattle Post-Intelligencer, November 13, 1925).
Bartell stayed in New York for the next several weeks, and (except for the Bartell management and its executive board) there appears to have been little public knowledge about the offer. That changed when he returned to Seattle on the morning of November 12. Two hours after he arrived, Bartell met with his executive board (which included his ex-wife, Beatrice [1879-1969], who in 1925 was vice president of the company), and also invited the managers of all 10 of his stores to attend.
He put it up to a vote -- sale or no sale? The decision was unanimous: no sale.
And there was another person Bartell approached for input. But this person wasn’t at the meeting; he was in elementary school that morning. In a story that’s been proudly handed down in the Bartell family over the years, Bartell talked to his 9-year-old son, George Jr. (1916-2009), told him of the offer and asked for his advice. “I think he knew what he wanted to do,” admitted Bartell Jr. years later. “But he came and asked me and said ‘what would you like me to do?’ I said no ... . I think it confirmed what he had already made up his mind to do, but it’s interesting that he did approach me on it” (Bartell Drugs: A Company History).
The Right Call
Bartell explained his decision to the Seattle P-I shortly after announcing that he had rejected the offer:
It was the right call. The United Drug Company as it existed in the early twentieth century is long gone, though if you look hard enough you can find a few scattered stores in the U.S. still using the Liggett and Rexall names (you’ll find more Rexall stores in Canada, where the brand has a stronger presence). Meanwhile Bartell Drugs is still going strong, with 58 stores in the Puget Sound area employing nearly 1,700 full- and part-time workers as of September 2011.
“I couldn’t quite stand to see the stores I have built from one small drug counter, begun down on Jackson Street in 1890, go into the hands of an impersonal outfit with chain stores all over England, Canada, and America. The managers felt the same way. They’ve grown up in the business. One of our managers is now selling to the children’s children of our first customers. What would a new chain company care about that? Every dollar we have used has been Seattle capital, made from our own stores, put back into new ones. I couldn’t sell out” (Seattle Post-Intelligencer, November 13, 1925).
“Million Bid, But Bartell Keeps Stores,” Seattle Post-Intelligencer, November 13, 1925, p. 4; “Reject Tender Of Million For Bartell Stores,” The Seattle Daily Times, November 12, 1925, p. 1; Dennis Worthen, “Rexall’s One-Cent Sale,” Pharmacy Practice News, Vol. 35, No. 3 (March 2008) website accessed August 31, 2011 (http://www.pharmacypracticenews.com/ViewArticle.aspx?d=Pharmacy+Heritage&d_id=206&i=March+2008&i_id=385&a_id=10315); “Business: Liggett’s,” Time magazine, December 7, 1925, website accessed August 31, 2011 (http: http://www.time.com/time/magazine/article/0,9171,721512,00.html); HistoryLink.org Online Encyclopedia of Washington State History, “Bartell Drug Company” (by Phil Dougherty), http://www.historylink.org/ (accessed September 1, 2011); “The Bartell Drug Company -- Store Locations Through History” (2008), in possession of Bartell Drug Company; Bartell Drugs: A Company History (video, 1997), in possession of Bartell Drug Company; “CPI Inflation Calculator,” Bureau of Labor Statistics website accessed September 5, 2011 (http://www.bls.gov/data/inflation_calculator.htm).
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