Alan Levin holds a chamois in one hand and a bucket in the other. Oldies 98.1 is blasting on a radio that sits on top of the freezer in his four-car garage. He grabs the cast-iron firehouse nozzle of the hose that he installed solely for car washing, then sets it to high. The water sounds like falling hail as it pounds the bucket, splashing Levin’s Tulane sweatshirt and ratty jeans.
Other people jog or pull weeds or sip cocktails when they need to blow off steam. Levin washes cars. And the more decisions he needs to make, the more cars he washes. He soaps his own Audi every other day. “It’s better than hitting the booze,” he says.
Every major decision of his life was aided by water and car shampoo: the decision to go to Tulane University, to trade politics for pharmacies, to work as a lobbyist for the Delaware State Chamber of Commerce and, most recently, to sell the business his father, Harry Levin, started in 1962—the iconic Happy Harry’s chain of pharmacies.
Levin turned the business into one of the most successful privately owned retail chains in the country. Since he took over in 1987, Happy Harry’s grew from 19 stores to 76, from 800 employees to 2,700.
Yet when Happy Harry’s hit a 65 percent market share in June—huge for a drugstore in one state—Levin sold the company to Walgreens. As part of the deal, Levin can remain with the company for three more years. Then he’ll have another big decision to make: what to do with the rest of his life.
So here’s fair warning to anyone who lives near Levin’s home in Montchanin:
Expect lots of suds.
Levin, dressed in a khaki suit from Wright & Simon, fiddles with a Kleenex while he stands in a long line at the Happy Harry’s store in Branmar Plaza, just like anyone else, waiting to pick up his prescription.
“I live on Clariton,” he says. After he signs for the medicine, Levin roams the store, as he often does, just to see what’s happening.
Joe Fletcher, a customer from North Wilmington, stops him after finding medicated chest rub. “Congratulations, Mr. Levin,” he says. “But in a way, we’re all kinda’ sad. When are you running for governor?”
Levin rolls his eyes and grunts, which is what he always does when politics comes up. He then says hello to Gertrude Brinton, an 80-year-old patron who knew Harry. “Oh Alan,” she says, “have you learned how to run your boat yet?”
Levin knows about Brinton’s kidney cancer and the surgery she had a year ago today. When she asks if it would be appropriate to stick a wad of cash inside the $8.95 Just Married photo album she just found for her grandniece, he assures her it would be.
“Alan cares about those customers,” says Ellen Levin, his wife of 25 years. “The decision to sell the stores was agonizing, but the build-up to the announcement was worse.”
Levin says he washed more cars during the deal than he ever has. “But once you decide something, you live with it,” he says. “You move on.”
For the past decade, most small drug stores have struggled while big pharmacy chains, able to absorb the rising cost of prescription drugs through better buying power, have thrived. Not that the business isn’t still lucrative. Total sales for all Happy Harry’s stores in 2005 were $475 million—a significant figure for a small chain. More than 71.5 percent of those sales were of prescription drugs, largely a result of prescription plan reimbursements from health insurers. Yet because insurance companies control the rate of reimbursement, pharmacy owners can’t control their potential for profit.
To make matters worse, Medco, the state’s pharmacy benefits manager, proposed changes last year that would have cut into every pharmacy company’s net. For Happy Harry’s, that meant a loss of $3 per prescription for state employees. Considering that Happy Harry’s made $40 million in 2005 by filling 75 percent of all prescriptions for state employees, the change would have meant a very big loss.
Levin believed other drug stores—Rite-Aid, CVS, Wal-Mart, Target—would reject the proposal. But when Eckerd accepted Medco’s terms, others followed. “So basically all these state employees weren’t going to come to us,” Levin says. “They were going to Eckerd.” When Wal-Mart and Acme bought in, Levin decided to sell.
Walgreens, well acquainted with Happy Harry’s large market share, proposed a sale at just the right time.
It was the only company, Levin says, he would have sold to.
Walgreens is the industry’s profit leader. Levin knew its employee perks—better benefits, stock options, scholarship programs—outclassed Happy Harry’s. And because of Walgreens’ Intercom Plus software, customers would gain the convenience of ordering prescriptions at any of the 5,200 Walgreens in the country. (With 400 new stores opening every year, there will be 7,000 Walgreens by 2010.)
Just as important, Walgreens allowed Happy Harry’s to continue many of the programs and activities—discounts to military families and teachers, as well as financial support of myriad local nonprofits and Little League teams—that made it such a good neighbor.
“We wanted to honor Alan’s commitment,” says Walgreens chairman David Bernauer, who wrote the deal with Levin. “We had a lot to learn from the way he did things.”
Levin and Bernauer agreed that most Happy Harry’s employees could stay in Delaware, which means you will continue to see the same faces you have always seen in the stores. Other employees, mostly administrators, would be offered jobs in the Lehigh Valley of Pennsylvania, Illinois, Texas or South Carolina. “There are people (at corporate) who will run major portions of the Walgreens Company,” Levin says. “To me, that’s more important than anything.”
Layoffs are likely when the Happy Harry’s warehouse on Ruthar Drive in Newark closes (scheduled for sometime in 2007). The remaining warehouse in Ogletown will become the regional Walgreens headquarters—and even that may be temporary. “We don’t know how long we’ll be there,” says Bernauer. “We can’t be there forever.”
The merger, along with penetration in Maine in 2007, secures Walgreens’ presence in the 48 contiguous states, or as Drug Store News puts it, “fills the gaping hole in Walgreens’ expanding Mid-Atlantic region.”
Nonetheless, the name of Happy Harry’s will live on “five years, maybe forever” in Delaware, Levin says, though the name has disappeared from the stores in Pennsylvania, Maryland and New Jersey, which are all now Walgreens.
Delawareans have said goodbye to local icons like Wilmington Dry Goods, Food Fair and countless mom-and-pop shops, then saw them replaced by big box stores and other national chains. So giving up Happy Harry’s means giving up another piece of Delaware’s identity.
On June 4, the day before Levin announced the merger, he went to the Lombardy Cemetery in Wilmington to visit Harry’s grave. “I went there to just kind of talk things out, and then I said to him, ‘I need a sign that you’re OK with this.’”
As Levin was driving home, the trunk of his car popped open for no apparent reason.
Levin signed the deal with, in his mind, Harry’s approval.
Customers who regularly saw Harry in the stores say he was a kind man. Alan Levin says he was “a better dad than I’ll ever be.” But in the office, Harry was often bull headed. Had it not been for his kidney failure, a minor heart attack, and the pancreatic cancer that killed him in 1987, his son may have never entered the industry.
After graduating from Tulane University with a degree in political science in 1976, Levin attended the Delaware Law School at Widener University. Then a staunch Republican—he now calls himself a “pragmatic” Republican—he became a deputy under Attorney General Richard Gebelein. When Democrat Charles Oberly III beat Gebelein in 1983, Levin resigned, though not because of Oberly, whom he still considers a friend, but because of his father’s illness.
Harry needed a kidney transplant in 1982. The plan was for Levin to manage Happy Harry’s for six months. That span stretched to 1½ years. When Harry returned to work, he and Levin found that, stylistically, they clashed. Alan’s modus operandi was to build consensus. Harry was captain of the ship.
“I was not mature enough to realize that (Harry) needed to reassert himself,” Levin says. “But I think he needed to realize that we had done things that were positive as well.”
Levin, then 34, instituted Friday meetings with company executives. The idea didn’t fly with Harry. “He came in and said, in front of the troops, ‘What the hell is this? A mutiny?’” Levin says. Something hit the fan. “Within 15 minutes, it was like rats fleeing the ship, and it was just me and him in there.”
Levin was offered a job as executive assistant and counsel to Senator William Roth, Jr., which he declined when Harry calmed down. But within weeks father and son started sparring again. Levin accepted Roth’s offer. “The boss is coming back,” Levin told the staff, “and I don’t mean Springsteen.”
While working in Washington, D.C., Levin spent little time at home. “I was not a good partner,” Levin says. When hurricane Bonnie swept through town in 1986, Levin stayed in D.C. to party with an old buddy instead of going immediately home to Ellen and their two babies. When Levin finally straggled home at 11:30 p.m., he found that Ellen had packed his bags.
Levin’s biggest regret is that he has stories like this to tell. Work always came before family. “I can’t make up that time,” he says.
Levin worked for Roth from 1984 to 1986. On the weekends, he handled Happy Harry’s business and visited Harry at Thomas Jefferson University Hospital in Philadelphia. At night he cared for Ellen, who was battling melanoma. When Harry became gravely ill, Levin’s mother, Diane, then chairwoman of the company, asked her son to take over.
Levin was forced to compare the challenges of running a family business with running Roth’s reelection campaign. Family won out. “Leaving Roth was another incredibly difficult decision,” he says.
Though the tension between father and son was palpable, Levin was shattered when Harry died.
“No matter what, you’re always your parent’s child,” Levin says. “No matter what I did here, as long as he was alive, no matter how bad I screwed up, he could always pat me on the head and basically say, ‘It’ll be fine.’
“And,” Levin adds, “He was my best friend.”
Despite his accomplishments at Happy Harry’s, Levin’s greatest success may be yet to come. There are many who say he’ll likely run for public office, though he denies it.
“Twenty years ago, I would have told you there’d be no doubt that I’d run. Now I don’t have the patience,” Levin says. “The problems in government are bigger than my ability, and I’d get in trouble because I’d always err on the side of the people.”
Levin realizes that no matter what he says, he won’t stop the political rumor mill. Yet he tries. “Look, if I was going to run, I shouldn’t have sold the business. I’d have had a better bully pulpit.”
But for someone who doesn’t want a political career (“Never say never,” Ellen says), Levin sounds like a populist with a platform. He’d want to abolish separate county and city administrations because, he believes, there are too many county councilmen on the payroll. He’d arrange all state-supported job training programs (education, health, social services) under one umbrella. And, Levin says, “There’s a lot of administration that goes on. Why do we automatically add 5 percent to the budget just because we have the money? Does it make sense? Does it work?”
When Levin chaired the Private Industry Council from 1992 to 1997, he suggested much of that to then-Governor Tom Carper, but, he says, to no avail.
Levin served as chairmen of the National Association of Chain Drugstores in 2001. He’s well connected in the industry and could, in the future, serve in another capacity. But he’s making strides at the Delaware State Chamber of Commerce. Before becoming chairman in 2005, he aggressively lobbied to lower Delaware’s gross receipts tax. House Bill 303, sponsored by Representative Deborah Hudson and Senator Thurman Adams, rendered substantial reductions in the gross receipts tax for many Delaware businesses and an exemption for 1,200 small businesses. Reductions totaled $16.7 million in fiscal 2006—an enormous relief for small businesses—and if all goes according to plan, there will be a reduction of $47.1 million in fiscal 2007.
“Delaware is one of the only states that has a gross receipts tax,” says James Wolfe, president and CEO of the Delaware State Chamber of Commerce. “Because of his background, Alan was instrumental in helping us take a 20 percent hunk out of fees for all businesses and 25 percent for automakers. Imagine how devastating a blow it would be to lose our two automotive plants.”
At the headquarters in Ogletown, Levin sits at a massive desk of mystery wood (it is covered with stuffed manila folders) and pours a second cup of coffee from the Dunkin Donuts Big Box o’ Joe he bought for the staff.
At least 40 framed photographs surround him. There’s Levin and Katie Couric. (Happy Harry’s donated $1.5 million on behalf of colorectal cancer research.) There’s Levin and Denise Austin, who was Happy Harry’s guest at a fitness fair and spokesperson for Nature Made Vitamins, a line Happy Harry’s carries. Austin, one of the most successful fitness experts in the country and a Lifetime Television Network star, calls Levin witty and passionate. “The sky’s the limit for Alan,” says Austin.
He could easily score a better job, an elected office, a political appointment, or a new business. As for perhaps the most logical venture, starting a car wash, Levin would fail—he refuses to do interiors.
