PHARMACY PROFILE

Longs Drugs Celebrates Its 70th Anniversary

Before the year ends, Longs Drug Store Corporation will reach a significant historical milestone. The company is celebrating its 70th anniversary.

Thomas J. Long and Joseph M. Long founded Longs Drug Stores in 1938. They were pioneers in the self-service concept and opened their first store under the name Longs Self-Service Drug on May 12, 1938, on Piedmont Avenue in Oakland, California.

Sixty-eight years later, Longs Drug Stores is one of the most recognized retail drug store chains on the West Coast and in Hawaii.

Pharmacies, cosmetics and over-the-counter medications have been important to the evolution of Longs Drug Stores merchandise strategy since the beginning. During the first 24 years, all stores were divided into two sections. The drug section included a relatively small pharmacy, cosmetics, toiletries and over-the-counter medications. The lobby section was typically at the front of the store and included photo, candy, and promotional merchandise.

The company's first private label products were created and developed by co-founder Tom Long, who was known for personally testing all private label products. Believing that quality is the key to the private label business, his philosophy was to listen to customer reactions and to personally use the products. By the end of 2007, private brands comprised approximately 13 percent of Longs front-end retail sales.

Tom and Joe Long boldly entered Hawaii when it was a territory. Locating retail sites proved to be difficult, but Longs opened its first store in Hawaii on March 29, 1954, located in downtown Honolulu. Real estate was limited on the islands and controlling interests kept mainlanders out, but Joe Long's strong selling and negotiating skills overcame these obstacles. By the end of fiscal year 2008, Longs Drug operated 37 stores in Hawaii.

In the early fifties, Joe Long anticipated the demise of downtown locations and the growth of shopping centers. Post-war prosperity fueled movement to the suburbs and consumers were quick to voice their demand for adequate parking at downtown locations. Longs first store in a shopping center opened in 1955.

In the sixties, the average size of the Longs stores became larger. The pharmacies were expanded and the configurations converted from two departments to one. The photo department gained in importance in the 60s, as did convenience goods.   

Since 1971, shares of Longs Drug Stores Corporation have been listed on the New York Stock Exchange under the stock symbol LDG. That same year, Longs reported sales of $169 million, which were generated by 54 stores and 2,250 employees. During the next ten years, Longs would triple its number of stores.

In 1980, Longs Drug Stores entered markets in Nevada with the opening of six stores. The company built four stores and purchased two stores from Pay Less Northwest. At the end of fiscal year 2008, Longs Drug Stores operated 24 stores in Nevada.

1982 was a milestone year for Longs Drug Stores. Sales exceeded $1 billion for the first time in the fiscal year ended January 28, 1982. Longs operated 162 stores and employed approximately 7,700 people.

By 1993, the number of Longs stores in California had grown to 236. In September of 1993, Longs acquired Bill's Drugs, a 20-store chain located primarily in northern California for a total purchase price of $23.9 million. Longs Drug Stores made another sizable acquisition in October 1999, when it acquired 32 Rite Aid stores in California at a total purchase price of approximately $150 million. By the end of fiscal year 2008, Longs Drug Stores operated 447 stores in California.

In August of 2003, Longs initiated the first large scale remodeling program in the history of the company. Longs also began incorporating elements of the remodeling program in new and relocated stores. By the end of fiscal 2006, 25 percent of the chain had the new look.

In June of 2006, Longs purchased the assets of Network Pharmaceuticals Inc. including 21 retail pharmacies. The retail pharmacies average approximately 1,100 square feet and are located within or near medical office buildings, clinics and hospital lobbies.

In July 2006, Longs opened a new 800,000-square-foot distribution facility in Patterson, Calif. The addition of this facility allowed Longs to increase its self-distribution of front-end merchandise in the mainland stores to 80 percent.

In February of 2007, Longs Drugs announced its plan to dispose of 30 stores. Most of the stores were in markets the company entered in the 80s and 90s without plans to further develop those markets. Longs entered Colorado in 1985 with the opening of two stores and grew to nine by the end of 2006. Longs acquired eighteen stores in Washington and two stores in Oregon in 1998 from Western Drug Distributors Inc., a franchise of Drug Emporium. By the end of 2006, Longs operated ten stores in Washington and two stores in Oregon. All 23 stores as well as seven California stores were closed by July of 2007.

During fiscal 1996, Longs formed a wholly owned subsidiary, Integrated Health Concepts (IHC), a prescription benefit management company. IHC was created to help Longs manage its relationships with managed care providers in response to the increased role of third party payors.

In 1997, Longs Drug Stores and American Drug Stores Inc. (now Albertson's Inc.) merged their prescription benefit management (PBM) subsidiaries and pharmacy mail order operations into a joint venture called RxAmerica. The joint venture sold the mail order business. On September 17, 2001, Longs exercised its option to acquire Albertson's interest in the joint venture and established full ownership of the PBM.

During the first quarter of fiscal 2004, Longs Drug Stores reestablished its mail order capabilities by acquiring American Diversified Pharmacies (ADP), a mail order pharmacy.

RxAmerica launched three prescription drug plans for Medicare beneficiaries on January 1, 2006 in 20 regions of the United States covering 35 states and the District of Columbia under the Medicare Prescription Drug Improvement and Modernization Act. The following year, coverage for the prescription drug plans was expanded to all fifty states.

THESE TWO CUTLINES WITH PICTURES AT THE START OF THE ARTICLE

Longs Drugs first store was located on Piedmont Avenue in Oakland, California. Founded in 1938, today, the company operates 504 stores in California, Nevada and Hawaii.

Pictured at a store opening in Hawaii are, from left, store manager Leo Giovanetti, Joe Long and Tom Long. The Longs opened their first store in Hawaii on March 29, 1954, in downtown Honolulu. 

THESE THREE CUTLINES WITH PICTURES AT THE END OF THE ARTICLE.

Vibrant, pleasing colors, well-placed lighting and an open, user-friendly layout enhance customers’ shopping experience at Longs Drugs’ Beauty Department.

One of Longs Drugs new stand-alone drug stores is located in Concord, California.

Pictured is the newly remodeled look of Longs’ pharmacy center, now branded the WellnessCenter. Nearly 50 percent of all its stores now feature the new look. Expanded services include in-store clinics, health screenings, and classes and events in selected locations.