In its 125th year, Bartell Drugs keeps community focus

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SEATTLE — Bartell Drugs is 125 going on 30. A largely new management team is reinvigorating the drug chain’s merchandising, marketing and operations, all the while reinforcing its 19th century roots in greater Seattle.

“We have a somewhat different point of view than the major chains,” says chairman and chief executive officer George D. Bartell, the grandson of company founder George H. Bartell Sr. “Part of it is that we’re so local. We’re so localized that we’re never going to be a Walgreens or a CVS. We’ve tried to be very connected to northwest Washington and sell local products, and I think we’ve done pretty well with that over time. So our strategy does not involve some kind of massive expansion, with stores in Texas or somewhere. We’re expanding little by little where we operate — right in this area for the foreseeable ­future.”

But a regional focus has hardly limited the retailer’s vision. “As a company we have gotten far more strategic; we want to elevate how we run the business,” says vice chairman and treasurer and George D.’s sister Jean Bartell Barber. “To do so, it became obvious that in a couple of places we needed to bring in new talent.”

Bartell Drugs’ third generation: Vice chairman/treasurer Jean Bartell Barber and chairman/CEO George D. Bartell.

The group is expected to draw heavily on its connections to metropolitan Seattle, says Bartell Barber. Having been in the area for a century and a quarter, the chain has had multiple generations of customers in the same families, she notes, and in some cases, multiple generations of employees. “We try to take advantage of those relationships,” she says. “George and I aren’t the only ones who have stories from the past; our guests and associates also have memories in which Bartell plays a big part. So that’s what we try to cultivate.”

Sometimes history and local ties converge, as in the retailer’s offering of commemorative wine from Washington state with a picture of founder George H. Bartell Sr. on the label. Washington state is the No. 2 producer of wine in the country after California, notes his grandson. “We’ve got great wine in this state,” he says. “It seems only logical that we should be emphasizing local products. That is a local product and has grandfather’s picture on it. It just seemed appropriate for our 125th anniversary to do something like that.”

While he credits the retailer’s earlier management team with getting it to a certain level of success, Bartell says the realization came that new people, along with new systems, were needed to move the chain ­forward.

Bartell Barber says business in general gets more and more complicated, “which means you need the people to handle that complexity. With managed care and PBMs and Obamacare and more regulation, the new team is more actively looking at what our opportunities are and how we can take advantage of them.”

The work of Peter Koo, Bartell Drugs’ senior vice president of pharmacy, exemplifies the contributions of the new executives. Bartell was the first chain in Washington to provide immunizations — with a limited introductory program — and expanded the offering at the behest of Koo. Since that expansion its pharmacies have also made an impact with travel clinics.

At the same time the chain has had to buy drugs more cost effectively and streamline pharmacy operations. “A lot of the changes we’ve made have been to add efficiency in pharmacy because reimbursement rates continue to go in the wrong direction,” says Bartell Barber. “We’ve been able to anticipate the changes in the pharmaceutical industry and respond in a way that keeps us ­competitive.”

Asked about Bartell’s survival in the face of massive industry consolidation, George D. Bartell says he has had many offers over the years to buy the company, often for a lot of money. “It’s really tempting, but we’re really not that tempted,” he says.

He cites an anecdote from the 1920s when Liggett supposedly offered his grandfather $1 million for the then much smaller Bartell Drugs. “The story goes that grandfather met with the store managers and asked what he ought to do and asked our dad [and future president George H. Bartell Jr.] — who was nine years old — what he wanted to do. The unanimous opinion was against selling. A few years later in the Great Depression, Liggett ran into a lot of problems. I can’t vouch for the details, but the story is part of company lore.”

Bartell says he wouldn’t know what to do with a lot of money. “It’s not like I need to go out and buy something that I can’t afford to buy now. I don’t have big needs or wants that way. It’s not like I want to be in space like Paul Allen or Richard ­Branson.”

More important than material desires, he says, is maintaining a business that shares the values of his family — namely ethical treatment of people and dedication to the local ­community.

The family and the business are mutually beneficial, adds Bartell Barber. “It’s our opinion that operating a business that can serve people — consumers and employees — grounds a family. Having a pile of money doesn’t. What’s most vital in the long run is for us to have a family that’s well grounded in what’s really important. George and I talk about this all the time. The most charitable thing we do for the region is to provide over 1,700 jobs day in and day out so people can take care of themselves. That’s really important to us. I think that’s helped us stay focused.”

Appreciation of that attitude by associates is reflected in the company’s lack of turnover. Scores of employees have worked for the retailer for two decades or longer. Helen Bonifacio in payroll has worked for the chain for some 40 years, as have Bob Davis and Dona Jackson.

“We care about that,” says Bartell. “The big corporations that have to meet quarterly earnings goals are under a lot more pressure. They’ve got to run their business differently. We run ours, as big as it is, like a family. We see our employees and our guests as being members of the extended family. We think that gives the public an option that they don’t get in a lot of other places.

“We think we offer something a little bit different. It’s not for everybody. There are some people for whom Walmart or Amazon or whatever is the perfect answer. But there are other people who like the personal touch that we give them and the fact that we’ve been around a long time.”

At the same time the chain has avoided the fate of so many other regional players — namely acquisition — by remaining fiscally conservative. “We don’t get highly leveraged; a lot of those companies got so leveraged they really didn’t have a choice but to sell out,” says ­Bartell Barber.

That means not expanding too rapidly, says her brother. “You’ve got to borrow money to grow fast. We’d rather grow at a measured pace, because debt is always going to get you sometime.”



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