After months of pandemic-related financial strain and years of uncertainty over its future, Bartell Drugs, one of the oldest companies in Washington state and one of the most familiar names in the Seattle business community, is being sold.
The 67-store regional drugstore chain, which has been owned by the same family since its founding in Seattle’s Central District in 1890, will be acquired by Rite Aid for $95 million, the companies announced Wednesday.
“We felt that this was the only answer,” said George D. Bartell, co-owner and chairman of the company his grandfather, George H. Bartell Sr., founded 130 years ago. “It was getting more difficult for regional operators to compete in the market.”
Pennsylvania-based Rite Aid, which has about 2,500 stores in 19 states, including 69 in and around Seattle, will keep the Bartell name on the stores. It disclosed no plans to close stores or cut any of Bartell’s about 1,600 retail staff. The sale is expected to close in December.
Bartell’s presence across neighborhoods was a big part of the attraction, said Heyward Donigan, Rite Aid president and chief executive officer.
“That’s kind of who we want to be, more and more, is your local neighborhood pharmacy,” said Donigan, adding that Bartell has been successful reaching demographic groups, including young middle-income mothers, that Rite Aid was particularly interested in.
“Together, this is going to be a terrific combination,” Donigan said.
News of the sale, or of the business realities behind it, may come as a surprise to many of Bartell’s customers. The privately held company has shared little financial data previously and outwardly appeared to be navigating the economic storms that have harried many brick-and-mortar firms. It opened a new site, in Belltown, as recently as 2019, a year it generated $550 million in sales.
But even before the pandemic cut into its revenue, Bartell Drugs had faced deep uncertainties. Since the Great Recession, especially, the drugstore business has seen thinning profits, a steady loss of sales to Amazon and other online retailers, and deep changes in the economics of prescription drugs.
Those changes increasingly have favored national chains like Walgreens and CVS, which can use their scale to cut costs, and have led many regional players to be acquired by larger rivals.
Bartell Drugs itself began with an acquisition. It was founded in 1890, barely a year after Washington became a state, when a 21-year-old pharmacist from Kansas named George H. Bartell purchased the Lake Washington Pharmacy at 2711 S. Jackson St.
In a booming city crowded with dozens of drugstores, Bartell focused on customer service, cleanliness and innovative products — it was an early adopter of gelatin capsules. By the mid-1950s, under the management of Bartell’s son, George H. Bartell Jr., the chain had grown to nearly two dozen sites.
After setbacks in the late 1950s and early 1960s, when the company saw its store fleet fall by half, growth resumed, and by the 1990s Bartell had more than 30 sites. Over the next three decades, that number would more than double.
George D. Bartell, who stepped away from the duties of CEO in 2015, credited the company’s growth to its continued emphasis on customer service and a product mix that relied heavily on local candy makers and other producers.