For its creativity and grittiness in the face of difficult market conditions, Longs Drug Stores Inc. has been named Drug Topics' Pharmacy Chain of the Year for 1994.
Longs has managed its business well, raising its net income to $52.8 million last year on sales of $2.5 billion, despite some turbulent times in its major markets California and Hawaii--over the past few years. Those times were marked by high unemployment and reduced consumer spending, due in part to cutbacks in the defense industry, along with several natural disasters--six substantial earthquakes in Southern California over the past six years as well as fires in the Oakland Hills area and Hurricane Iniki on the island of Kauai, both in 1992.
This is the seventh time Drug Topics has bestowed this special honor on a drug chain. Each year, the award goes to an organization that has excelled in some major aspect of chain drug pharmacy. This year, the award is being presented to a chain that has done an exceptional job of rising above extremely adverse market conditions. Longs joins CVS, Jack Eckerd Corp., Walgreen Co., Rite Aid Corp., May's Drug Stores, and Arbor Drugs as chain retailers that have been recognized by Drug Topics.
Company chairman and CEO Robert Long is scheduled to be given the award at the National Association of Chain Drug Stores' annual meeting this month in Palm Beach, Fla.
In the culture Longs has faced adversity by meeting problems head-on with a corporate culture that encourages its employees to act individually while helping each other and their customers.
Take the earthquake and aftershocks--that hit Los Angeles this past January. It caused mostly minor damage in about 12 Longs stores; one store, in Northridge, sustained structural damage that eventually cost $150,000 to repair.
Most of the damage in the stores occurred when merchandise fell off the shelves onto the floor as a result of the tremors. This is not an insignificant problem since Longs' stores on average carry inventories of $1 million each and are about 23,000 sq. ft., including a "warehouse." Only three stores remained closed temporarily, said president Stephen Roath, and all were opened within several days. The total cost of that disaster was put at "less than $1 million."
However, "the real story about the earthquake in Southern California is the human story of support that was shown by Longs' employees whose stores were not damaged," Roath told Drug Topics. "Many drove that day under impossible conditions as a result of freeway and roadway damage to get to the five major stores involved--crossing over from Fresno, Bakersfield, San Diego, and farther north along the coast. When they arrived at a store devastated by the earthquake, the employees at the damaged stores very often broke down and cried, realizing they weren't alone."
While these stories are heart-warming, they also were a way of "sharing the culture," Roath said. They taught "everyone what they should do in an emergency."
And with four aftershocks that measured over five points on the Richter scale hitting the same stores each time, employees tackled the job of cleaning up more than once.
In Los Angeles, Longs serviced customers on an emergency basis, filling prescriptions and giving away thousands of gallons of water as well as batteries and flashlights to those who needed them.
In Kauai, after Hurricane Iniki hit, Longs' store in Lihue was open again within a day, although employees managed under makeshift conditions for some time because a portion of the roof had collapsed in to the store. Again, emergency supplies were given away to local residents.
"We opened the store for four hours a day for quite a while. Both shifts of our employees worked during those four hours. After a time, we were able to open for eight hours," said Roath. "Our shop on the mainland built new fixtures and had them in Kauai in under four weeks. …