In 1898, 23-year old Liggett was working out of Boston, Massachusetts, urging the retail drug trade to sell a bottled tonic called "Vinol" made from wine and cod livers. The nostrum had been sold on the open market with only fair success until Liggett fielded the idea for a limited franchise plan that would help eliminate the self-destructive practice of price cutting. Approaching the leading druggist in each town, Liggett offered an agency contract for Vinol. In return, the drugstore would enjoy company sponsored local and national advertising as well as a monopoly on repeat sales in his area. The plan was well received and proved to be a winner.
|Dealer promotion for Vinol, 1912|
In the fall of 1902, a group of drugstore owners and other investors met in Chicago. Forty of them, including Liggett, agreed to purchase stock in the amount of $4,000, creating $160,000 capital to launch the new company. The organization was chartered as United Drug Company, and “Rexall,” signifying “King of all,” was registered as the primary trademark. A small factory building in the Roxbury district of Boston was leased, production and printing machinery installed, and amazingly, the first orders of Rexall proprietary medicines were shipped in mid-March 1903.
|Original factory, Boston 1905|
|Louis K. Liggett in 1920. Photo by Paul Thompson|
|Justin W. Dart 1952|
Photo by Curtis Studios, Los Angeles
Christmas 1949 Rexall Radio Show
In the 1950's many large companies began to diversify with the growing economy, and Rexall Drug was no exception. Primary acquisitions were in chemicals and plastics, including the purchase of Tupper Corp. in 1958 for $16 million. A corporate name change to Rexall Drug and Chemical Company took place in 1959, and expanding interests prompted yet another metamorphosis ten years later to Dart Industries, with Rexall Drug Company organized as a division.
In 1977, Dart Industries sold Rexall Drug Company to a group of private investors that eventually eliminated the franchised dealerships. Rexall products were promoted to a larger market, including super drugstore chains, and the original character of the Rexall manufacturing/distribution system vanished. The drastic change in marketing policy didn’t last long. By 1986 the Rexall Corp. factory in St Louis closed and remaining assets were sold to an investment group in Ft. Lauderdale, Florida that specialized in vitamin supplements.
In retrospect, the corporate philosophies that guided Rexall over the decades were of two schools, each reflecting leadership of the men that successively charted the firm’s course. Louis Liggett focused on cooperative manufacturing and distribution of drugstore merchandise to his own chain and to franchised independent dealers. Justin Dart, consistent with the times, saw the need for diversification, and eventually regarded the retail sector as burdened with profit-eating overhead. He eliminated company-owned stores and personnel that were judged to be of marginal value. Dart also ventured into new manufacturing and distribution areas such as plastics and direct sales that were sometimes phenomenally successful, such as Tupperware, and sometimes not, like the Vanda Beauty Counselor enterprise that failed to rival Avon.