Herbert H. Haft, 84, the Washington area discount retailer whose drive to sell drugs at cut-rate prices made him a multimillionaire and whose empire dissolved in a nasty and very public family feud in the 1990s, died Wednesday at Sibley Memorial Hospital. He had heart disease.
Haft built Dart Drug from a single store in Adams Morgan to a chain of more than 70 outlets over a 30-year period and expanded his business with the creation of Trak Auto, Crown Books and Total Beverage and the acquisition of Shoppers Food Warehouse. "They were all based on the fact that people prefer to pay $4.99 [rather] than $10 -- it's as simple as that," he said in 1986.
As his businesses grew, Haft branched out, building a string of 40 area shopping centers. He called himself "the godfather of discount retailing," but he wanted more. Seeking to leap into the upper echelon of American business, he launched a number of hostile takeover attempts in the 1980s, aimed at such entities as May Department Stores Co., Safeway and Stop & Shop. None succeeded, but the Haft family made more than a quarter-billion dollars as the initial purchase of stock in the targeted companies was bought out at significantly higher prices.
Haft stood just more than five feet tall and had a pompadour of white hair that added several inches to his height. His business reputation was that of a secretive, aggressive retailer who never backed down from a challenge. He fired his eldest son, Robert, who had been president of Dart Group Corp., the retail holding company, and tossed his wife of four decades, Gloria, off the board of directors. She sued for divorce, and his son sued for wrongful discharge.
The younger son, Ronald, who had sided with his father, also was caught up in the internecine dispute. On CNN's "Moneyline," Herbert Haft accused Ronald of "extortion, blackmail, bribery, fraud, misappropriation, hiding funds, false statements and taking assets without authorization." The family feud played out in excruciating detail in court and on the front pages of area newspapers for the better part of the 1990s.
"I think it was closer to five years, but it certainly felt like a decade," Robert Haft said yesterday.
The suits, countersuits, trials, legal proceedings and the bankruptcy reorganization of the shopping center management company, Combined Properties Inc., drained hundreds of millions of dollars from the family fortune and Dart's coffers. In 1997, Herbert Haft accepted about $50 million in exchange for leaving the business, ending his control of the empire he had founded.
Haft, who was born in Baltimore, graduated from Central High School in Washington. He received a pharmacy degree from George Washington University, where his "best experience," he said, was participating in the nonstop bridge game at the student union.
"You learn how to read people," he told a GWU alumni gathering in 1986. "People play bridge the way they negotiate."
He was a pharmacist at a traditional drugstore at Porter Street and Connecticut Avenue NW when he heard about the idea of discount retailing. He and Gloria Haft, a cosmetician, opened the first Dart Drug at 18th Street and Columbia Road NW in Adams Morgan in 1955, and "it was an immediate hit," Robert Haft said. "He was at the beginning of discounting in so many fields. . . . For him, [discount retailing] was a business and also a social good."
But Haft ran into a major obstacle. Pharmaceutical distributors and consumer goods wholesalers refused to sell to him because his prices undercut their other customers'. He sued and lost repeatedly until the Justice Department charged Parke-Davis & Co. -- then one of the nation's largest drug firms -- with violating federal antitrust laws by conspiring to fix drug prices. Haft was one of the government's lead witnesses and gained much publicity when Parke-Davis threatened to cut off his supplies after his court testimony. After taking the case to the Supreme Court, the government finally won.
The business took off. Haft remained primarily in drugstores until Robert graduated from Harvard Business School in the late 1970s, joined his father's firm and launched Crown Books, a chain built on the same principle of mass discounting.
Haft sold Dart Drug in 1984 for $160 million but retained control of the holding company, Dart Group. About the same time, he proposed turning the old Tivoli Theater in Columbia Heights into a Safeway, but the development languished for 15 years while preservationists sued to stop the proposal. The city eventually took the property back.
Total Beverage, a beer-and-wine discount retailer, was started in 1992, and disagreement over the direction of that company may have been one of the triggers for Haft's abrupt dismissal of his son from the Dart Group board, news reports said at the time. The family and companies then spun into a maelstrom of trouble and litigation, which continued until 1998.
In 1999, Haft launched another new company, HealthQuick.com, an Internet discount retailer of vitamins and health care products. In 2001, the company assets were sold.
Robert Haft, who ran a competing online health care retail firm, dismissed his father's last venture as a failure but said his father's interest was in starting up businesses that would save money for consumers.
"He wasn't a sportsman. He wasn't a card player. He liked to start businesses. Each field was a new adventure for him, and there are very few people who are successful in multiple fields. The passion he had was for saving people money," Robert Haft said.
In recent years, the family slowly began to reconcile, Robert said, and everyone spent time with Haft in the hospital over the past few months.
Haft was a member of Washington Hebrew Congregation.
His 45-year marriage to Gloria Haft ended in divorce.
Survivors include his two sons, both of Washington; his daughter, Linda Haft of Bethesda; and five grandchildren.