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Walgreen Way”bedrock values coupled with bold ventures”was the bot-
tom line. The numbers couldn™t be ignored, starting with stores: 2 by 1910,
20 by 1920, and 65 by 1925.
More important, Knight felt, was the fact that “the average volume of
sales per store has shown a remarkable increase.” For comparison, Knight
used the Great Atlantic & Pacific Tea Company (which we would later
know as A&P), partly because Walgreens had already surpassed the other
chains in town.54
Sargent™s had been Chicago™s most venerable chain since Ezekiel H.




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Sargent opened his first shop on Lake Street (the city™s main drag before
the Chicago Fire) in 1852, just 19 years after the incorporation of the town
itself. Sargent™s stores could count Abraham Lincoln, Marshall Field, and
Chicago Tribune owner Joseph Medill (for whom Northwestern™s acclaimed
school of journalism is named), plus all of Chicago™s first generation of
mayors among their repeat customers.55
By the time Knight started researching his thesis, however, Walgreens
was growing at Sargent™s expense, putting the once-popular chain in re-
treat. Knight therefore decided that A&P, which was innovative and on
the rise like Walgreens, made for a more apt comparison.56
Started in 1859, A&P sold $25,000 worth of goods per store in 1915
and almost doubled that figure to $45,000 by 1919. It was an impressive
accomplishment by any standard”except Walgreens™, which generated
$30,000 in sales per store in 1916; $67,400 in 1920; and $138,000 in 1925,
dwarfing A&P™s figures.
Knight considered this “perhaps the most solid development, for to in-
crease sales per store is both more difficult and more useful than merely to
increase their number,”57 a strategy the company surely follows today, even
as it expands to record dimensions.
Knight™s thesis was well received by the school, which conferred its
master™s degree on him. In the wake of his dissertation, Stanford
University, a New York accounting firm, and Walgreens all offered Knight
permanent positions. Charles Sr., however, was the most insistent. “I just
must have that young man with us,” he told his executive team. Knight ac-
cepted Walgreen™s offer to fill the new position”a position Knight had
recommended creating”of “comptroller” and promptly enacted his sug-
gestions for consolidating the accounting department™s tasks to avoid the
unnecessary duplication of duties.
Walgreen™s initial impression of the young man proved, as such impres-
sions usually did, to be true. Five years into the job, Knight became a com-
pany director; he retired in 1961 as a vice president and treasurer.
“He would approach a subject from many viewpoints and develop
many angles,” Chuck Walgreen recalled. “He was like a dog with a




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82 america™s corner s tore

bone”wouldn™t let go until it had been gone over most thoroughly. Most
folks did not drop into his office after 4 o™clock because they learned
they would be tied up until at least 6:30 and would be having a late dinner
at home.”58



“absolute dominance”

When Robert Knight started his thesis, Walgreens had already blossomed
to 59 Chicago stores. When he finished, Walgreens had 69 in the
city alone, adding almost one a month, with plans to accelerate the ex-
pansion plans dramatically. By 1926, the year Knight became Walgreens™
first comptroller, Walgreens had opened 33 more Chicago stores, for a
total of 92.
According to a brochure Walgreens put together to coax manufacturers
to pool their resources on advertising, all Walgreens™ Chicago sites were
“centrally located. . . . Dotted along every boulevard entering or leaving
the city, they prevail at principal elevated stations, they dominate the
downtown shopping area, and [they] cover main suburban points.”59
It might have been a sales pitch, but Walgreens could back up every
claim. As Dizzy Dean once said, “It ain™t braggin™, if it™s the truth.” And it
was. By the mid-1920s, Walgreens ruled Chicago™s drugstore business, in-
cluding “absolute dominance in the Loop area,” a region it had entered
only five years earlier.60
The explosion required the company to create its own “SWAT” (spe-
cial weapons and tactics) team for store openings, which occurred
monthly by the mid-1920s, then weekly by the decade™s end. In typical
Walgreens™ style, the company found a champion to head up the unoffi-
cial “store opening” team, who was eager to dive headfirst into the task:
Elmer E. Reuckert.
Reuckert signed on as assistant manager under Harry Goldstine at
Walgreens fourth store, at 43rd and Calumet, in 1914. “A robust sort,
Reuckert achieved a kind of celebrity, even after becoming a top-flight




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manager, by donning work clothes to work with store opening crews for
the rest of the decade and beyond,” the Kogans wrote. “By 1934, when he
was named a director of the company and its secretary-treasurer, he told a
Pepper Pod reporter that he had thus aided in opening no fewer than 105
stores, most of them in Chicago and environs.”61
Opening store after store might have been exciting, but Chuck
Walgreen recalled the other side of the boom: all the blood, sweat, and
tears that the seemingly endless grand openings required. While taking a
year off in the middle of his studies at the University of Michigan in
1925“1926, Chuck was a central member of Reuckert™s team. “We were
opening a store a week,” he recalled, “but they were tiny, only about 2,000
square feet. The carpenters would have the store ready for us, and we™d
move right in. The soda fountain took up half the space, merchandise the
other half. We would stock [shelves] and work out window displays. We™d
start Monday morning and finish up Friday night, working 10 or 12 hours
a day. We™d have the opening Saturday. Sunday, we™d sleep all day and get
ready [to open another new store on] Monday.”62
After Chuck returned to his studies in Ann Arbor, Reuckert and friends
had no trouble staying busy, opening a store a week throughout 1927.
Though still very much a Chicago-centric company, by that time
Walgreens had already dipped its toe into Hammond and Gary, Indiana;
Milwaukee, Wisconsin; and St. Louis, Missouri. Walgreens™ executive
team believed they were ready for a much riskier move: New York.63



if they can make it here

When Charles decided to dive into something, he usually opted for the
deep end. And so it was that Walgreens opened its first New York store
right in the middle of it all: at 1501 Broadway and 44th Street, in the
Paramount Theater Building. The new store was stocked with one of the
best perfume counters in the city to ensure its survival until, the execu-
tives hoped, the rest of the store caught on with the neighborhood.




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The New York franchise was more than just another store. Located in
the heart of the theater district, the store become a favorite stop for famous
writers, singers, and particularly actors, who bought their sundries there,
ate in the basement restaurant, and admired the caricatures of famous pa-
trons adorning the walls. Those who longed to join them on the “Wall of
Fame” often worked for the store on their way up or whiled away the after-
noons with their fellow starving artists in the soda fountain booths, dream-
ing of great days ahead.
With so many future stars having worked there, the site earned a place
in acting lore. Long after she had become a household name, Lucille Ball
liked to tell the story of her brief tenure as a waitress there in 1938, when
she was fired for forgetting to put the bananas in a banana split”a little
detail the store managers apparently stressed.
Legendary columnist Walter Winchell called these aspiring thespians
“Walgreen actors” and the Walgreens basement “Ham Cellar,” “Sardi™s
Basement,” or “The Banana Split Club.”
Two decades later, the Kogans reported”and years after Walgreens
opened a larger store in the Times Square Building just two blocks south”
a feature writer for the New York World Telegram in the 1940s described
Walgreens™ Paramount store as “one of the major institutions of the the-
atrical world.”64
The spot inspired writer Ruth McKenney to pen a series of New Yorker
“Talk of the Town” stories, which were adapted for a stage play called My
Sister Eileen in 1941, which in turn became a popular Hollywood movie
musical of the same name in 1955.
Loyalty to Walgreens™ flagship Manhattan store was not limited to the
famous or famous-to-be, of course. John Oveian, a Yugoslavian immigrant
who worked in the Paramount Building as a maintenance man, set a
record that, undoubtedly, still stands. From the time Walgreens™ first New
York store opened in 1927 to 1957, Oveian said in his letter to Chuck
Walgreen that he ate every breakfast, lunch, and dinner in the Walgreens™




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basement restuarant. For that reason, Oveian wrote, he felt he deserved a
gold watch from Walgreens.
Chuck asked Russell Plummer, who worked in Walgreens™ food service
department, to fly out to New York to see if Oveian™s story was on the
level. Plummer discovered that Oveian, a lifetime bachelor who rented a
modest apartment near the Paramount, had naturally become something
of a local legend with every Paramount Walgreens™ store employee, past
and present, and had more seniority than all of them. As far as he could,
Plummer verified Oveian™s claim”no one there recalled him missing a
single meal”and recommended to Chuck Walgreen that he grant
Oveian™s request. Walgreen agreed.65
The store™s fountain manager, Joseph Pape, and his supervisor, Fred
Sparks (who remembered Oveian from the days Sparks worked there in
the 1930s) presented the loyal customer with his gold watch in Times
Square, as reported in the New Yorker™s “Talk of the Town” section and
Walter Winchell™s nationally syndicated column. When a Pepper Pod re-
porter asked Oveian if had ever grown weary of Walgreens™ menu after eat-
ing 31,799 meals there, he said, “No, I had to stop because the store
closed.”
It should not come as any surprise that after Walgreens shut the doors
on its Paramount Building shop, Oveian quickly switched his allegiance to
the Walgreens at Times Square a few blocks away. He and Chuck
Walgreen continued their Christmas card correspondence every year until
Oveian™s death in the mid-1980s.
Walgreen had entertained the idea of taking the company public for
some time. The chain™s incredible growth convinced him that they needed
to go public to help fund the expansion underway, and the success of the
first New York store convinced him they were ready.
On the morning of February 15, 1934, Walgreens could boast 483 stores
(25 percent of which were outside the Midwest), 12,000 employees, and,
for the first time, the letters WAG on the New York Stock Exchange.




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Walgreens was on the board.
If you had bought a single share that day for $24.625, it would have
split nine times into 512 shares, each valued at $36.25, by December 15,
2003”and would be worth a total of $18,560.

read all about it

As the company™s profile rose, so did its exposure, attracting outside ob-
servers who wrote for larger audiences than professors reading graduate dis-
sertations at the University of Chicago.
Four months after Walgreens went public, in the September 1928 issue
of Chain Store Review (now called Drug Store News, the industry™s principle
publication), Charles Walgreen explained the philosophy behind the
chain™s great expansion. “Growth in business is largely multiplication,” he
said, sounding much like a recent Walgreens™ CEO describing the chain™s
amazing growth in the last quarter century. He continued:

Small, a pattern is set, which, with growth, remains substantially un-
changed. Provided the person is correct in substantial details, the
business can multiply itself a thousand-fold without altering the para-
mount task of management, which is keeping all phases of essential
details in correct relationship to the whole.
But if there are uncertainty and doubt in that original pattern,
these elements are simply magnified by growth”size possesses no
magic for overcoming defects”and the fear of bigness is probably
largely a fear that something like this may happen. . . . I had the fear
of bigness once”but no more. A successful business, like a tree,
grows rhythmically, uniformly in all its essential parts. I entertain no
fears for the future of that business which starts out with fundamen-
tal proportions right and keeps them right even when events require
computations to be made in the millions instead of the thousands.
However big the figures may be, the percentage will never outswell
100!66




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In the June 1929 issue of the same publication, Walgreen outlined the
company™s approach to hiring and training new employees”what we
would call personnel issues. “We like to hire young men just as they come
from the schools of pharmacy, and we maintain vigilant contacts with
schools to that end,” Charles explained. “Whenever we hire a man, we bear
in mind that we are hiring a prospective manager. We do not want a man
unless we have reason to believe that he has the ability and ambition to be-
come a store manager, or better.” When they found their man, he received
$50 a week, better than most equivalent jobs, but only a “starting point,” in
Walgreen™s words.67 A good manager could earn substantial performance
bonuses and enhance his portfolio with plenty of Walgreens stock.
When Walgreens went public in 1928, the company required all private
shareholders to cash in 7 percent of their stock. That earned one lucky
employee $102,000 for his 7 percent; another manager got $68,000; and a
soda fountain manager got a check for $24,000.
“I regard it as a pleasant obligation,” Charles said, “and also as the

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