From Myrtle & Malteds

Myrtle Walgreen was a farm-bred girl whose face had never known the tint of man-made coloring. One day in the early 1900s her pharmacist husband brought home some lipstick and rouge, dabbed a little on her, then urged her to show the new face in public. In Myrtle's ruby lips, Charles R. Walgreen saw rosy profits. Sure enough, neighboring wives rushed to his drugstore on Chicago's South Side, where they found not only Walgreen-produced pharmaceuticals and cosmetics, but hot meals cooked to Myrtle's recipes. As business boomed, Charlie continued to innovate. One of his best known products emerged in 1921, when a soda jerk invented the malted milk shake.

From such simple beginnings, the prototype American drugstore grew. Today, the Walgreen empire has 523 wholly owned outlets, plus a franchise network of 1,900 independents licensed to use the Walgreen name and sell its products. Store managers get rigid directions on everything from sexy magazines and paperbacks they cannot sell to what products they should push. The Golden Rule for all Walgreen store managers is: go below, never above, the recommended price.

It has proved a profitable formula. Sales have doubled in a decade, and this year the company is certain to go past the $500 million mark. Earnings advanced by a highly impressive 24.7% during the first half. Walgreen stock has risen correspondingly, from a 1966-67 low of 34 3/4 to 60 1/2.

After Charles Sr. Responsible for this showing are Charles Jr., 61, now chairman (the founder died in 1939), and Alvin A. Borg, 63, who is president. They have made the stores largely self-service and have constructed some Super Centers with as much as 30,000 sq. ft. of selling space.

Now Walgreen's is moving in other directions. In 1946, it purchased Sanborns in Mexico City, a restaurant and gift shop combination. Closer to home, the company took over Houston's Globe department stores, now has six of the city's well-known Danburg junior department stores as well, plus nine other outlets in the Southwest.

All the while, Walgreen's aims to maintain low prices made possible by tightly integrated operations. The drug and cosmetic factory in Chicago stocks the chain's shelves with Perfection cold cream, Orlis mouthwash, and Olafson vitamin tablets and capsules, of which the company makes 290 million annually. Eight ice cream plants churn out 3.2 million gallons of 21 flavors each year, while its roasting and blending plant produces enough coffee to fill 50 million cups. Watching over all this is a computerized inventory system.

Walgreen's management has not neglected the human factor. Offering to pay the last three years of a five-year pharmacy course, it has sent over a thousand employees through school in 22 years, and currently 140 are in the program. The company can use them. Last year Walgreen's filled more than 15 million prescriptions, expects to approach the 20 million mark by year's end.

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