In a management shake-up that surprised the drug store industry, Dart Drug Stores Holdings Inc. announced this week that its chairman and chief stockholder, Alvin F. Towle, has left the 77-store chain.
Towle apparently left because of a difference of opinion over how the chain should be run.
Stephen J. Hansbrough, who had been managing Dart with Towle ever since the drugstores were spun off from Dart Group Inc. two years ago, has assumed Towle's post as chairman of the drug stores' holding company.
Hansbrough took the reins of the drug stores last October when, in an unpublicized move, he took over from Towle as chairman of the subsidiary, Dart Drug Stores Inc. Towle then was to concentrate on strategic planning as head of the holding company.
In departing, Towle sold all of his holdings in Dart -- estimated to be about one-quarter of the company -- back to Dart. Dart officials refused to say how much Towle received for his stake in the chain, which was purchased 18 months ago for $160 million.
The shake-up "is a shock to the industry," commented Sheldon W. Fantle, who, as chairman of Peoples Drug Store Inc., is one of Dart's chief competitors. "Al is a hell of a good merchant," he said.
Joseph H. Santarlusci Jr. remains vice chairman of the drugstore subsidiary and will become president of the holding company. Santarlusci came to Dart last year from Smith Barney Harris Upham & Co., where he was a partner in charge of leveraged buyouts.
Towle could not be reached for comment. A company statement said Towle "acknowledged that he felt he had accomplished his personal goals and could now devote his talents to other endeavors."
Hansbrough said Towle's departure "was mutually amicable."
Hansbrough acknowledged industry speculation that Towle left because of a difference in opinion on how the company should be managed. "It came down to a dispute of philosophy on how to run the company," Hansbrough said yesterday.
At issue, according to Hansbrough and Santarlusci said, was how to merchandise and market the 32-year-old chain: Should the chain retain its original operating philosophy of trying to keep its prices low, hoping to recoup profits by drawing in large volume? Or should it try to raise its prices, and thereby its margins to bring in more profits?
According to Hansbrough, Towle favored the former strategy, while Hansbrough and Santarlusci preferred the latter.
Additionally, there appeared to be some disagreement on whether the chain, long noted for its large stores, should open smaller units in areas where space is scarce. The first small unit -- 5,000 square feet -- opened last month on 20th St. NW, between L and M streets.
The reorganization should not affect the chain's plan to sell stock to the public shortly, Santarlusci added.
Dart had been part of the Dart Group Inc. (then named Dart Drug Corp.) until 18 months ago when Dart Chairman Herbert Haft decided to sell the chain for $160 million in a leveraged buyout. Towle, who had just become Dart president, led the buyers' group.