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Some 51 years ago — in late 1959 to be precise — Eli Cohen, a 33-year-old entrepreneur with a retailing background that leaned heavily to apparel, opened a 500-foot “cut-rate” store on Broadway, between Duane and Reade streets, in Manhattan.
The store mainly sold health and beauty aids, and its appeal, at a time when Fair Trade laws were being seriously questioned for the first time, was price. “Even though Fair Trade pricing on national brands was still protected, we believed we had an opportunity to be less stringent in following Fair Trade prices,” says Cohen today. “Turns out we were right. We had injunctions issued against us. But it never went further than that.”
The store was a bare-bones affair, notable for its pine board fixturing and the use of black crayon to mark prices. Cohen remembers that one of the inducements for customers was a pack of cigarettes for 25 cents. Equally attractive was the fact that branded H&BAs were discounted, though the term had not yet come into vogue.
“That was the day of mom-and-pop drug stores,” remembers Cohen, who also recalls that 17th Street in Manhattan was known as drug store row. “We were offering something different.”
“The store was successful right away,” says Cohen, who, along with his brother Abe — who had come on board just to help Eli launch the initial store — quickly opened a second store almost directly across the street from the initial unit, this time with a pharmacy. And so Duane Reade was born.
A year after the opening of the initial Duane Reade store — “We opened it under the Duane Reade name because we wanted to make certain our customers understood that it was a neighborhood store,” says Cohen — Jack Cohen, Eli’s other brother, joined the company, which soon began opening drug stores throughout lower Manhattan.
“Every block was another city,” is the way the Cohen brothers viewed their opportunity. “We soon became New York’s downtown drug store chain.”
Cohen says he was not surprised at his company’s success, mostly because he didn’t think much about it.
“We took things one day at a time,” he recalls. “We just wanted to serve our customers and grow the business. We were hard workers — that’s what I most remember.”
In time, Duane Reade expanded both within and outside lower Manhattan. The chain eventually opened two stores in the World Trade Center — the only drug chain that ever operated in that location — and one in the Empire State Building. Though the company ultimately began opening stores outside Manhattan, to residents of that borough it was always their hometown drug chain.
Eventually, Duane Reade became the envy of the chain drug industry — the highest-volume drug chain, per store, in the country.
By the time Cohen and his brothers left the business in 1992, Duane Reade had significantly altered chain drug retailing in America. Not only were the Cohen brothers in the forefront of the movement to overturn the anachronistic Fair Trade laws, their approach to selecting locations helped revise the thinking about how near each other drug stores of a particular chain could be located without unduly affecting the volume of each.
Perhaps most significant, the idea of approaching each block in Manhattan as another city, one of the core Duane Reade go-to-market strategies that set it apart from the rest of the industry, remains very much a core strategy today — used most effectively by Walgreens’ Duane Reade unit.
As for Eli Cohen, he doesn’t much dwell on his years in chain drug retailing, noting only that the industry today has changed, and largely revolves around Walgreens and CVS.
Now in his early 80s, he divides his time between residences in Brooklyn, where he grew up, New Jersey and South Florida. When prompted though, he easily recalls the early days of his drug chain, a time he and his brothers challenged standard industry practices, not only by selling products below “list” price but by naming his initial store after its location rather than for the family that launched it.
He remembers as well the characteristics that set the pioneers of chain drug retailing in America apart and ultimately insured their success: The idea of growing the business by serving the customer, and a willingness to work at the business. Those two singular features, shared by every one of the chain drug industry’s founding fathers, transformed that 500-foot cut-rate health and beauty aids store on Broadway between Duane and Reade streets into the most successful drug chain New York City has ever known.
And, oh yes, Eli Cohen remembers one thing more: “Building Duane Reade was a phenomenal lifetime experience.”
