Arbor Drugs

Arbor Drugs

Industry	Drug store
Founded	1963
Founders	Eugene Applebaum
Defunct	1998
Fate	Acquired by CVS Corporation
Headquarters	Troy, Michigan
Number of locations	207 (1998)
Area served	Southeast Michigan

Arbor Drugs was a regional pharmacy chain headquartered in Troy, Michigan. At its peak, it ranked as the eighth largest drug store chain in the United States.

The company gained recognition for its consistent profitability, methodical growth, and dedicated focus on pharmaceutical services. Unlike many competitors who diversified during the 1970s and 1980s, Arbor concentrated primarily on prescription fulfillment.

History

Eugene Applebaum launched Civic Drugs in 1963 at the intersection of Michigan Avenue and Greenfield Road in Dearborn, Michigan. Throughout the 1970s, he expanded by acquiring five additional drugstores. The formal establishment of Arbor Drugs occurred in 1974 when Applebaum and Bruno Manni consolidated these outlets under a single corporate identity named after Ann Arbor, Michigan. In 1979, Arbor was among the pioneers in implementing computerized prescription services, and by 1989, its pharmacy records were fully networked.

The chain grew to 30 stores in 1981 following the acquisition of 11 former Cunningham Drug locations. Applebaum's attempt to broaden the brand’s geographic reach included opening three stores in the Carolinas; however, these locations were short-lived. In 1986, Arbor acquired Sentry Drug and went public that same year, debuting on the NASDAQ exchange under the ticker ARBR. At that time, the chain operated 52 stores and reported $152 million in revenue.

During the early 1990s, Arbor undertook remodeling projects for approximately 70% of its outlets and invested $10 million in upgrading pharmacy technology. This period also saw expansion into communities such as Ecorse and Hamtramck. By 1992, total sales had reached $500 million.

In July 1993, Arbor faced allegations of overbilling the Blue Cross Blue Shield Association by at least $17 million for prescriptions dating back to 1988. The dispute was later resolved with a $15 million settlement. A year later, the company was accused of deliberately inflating Medicaid reimbursement claims and settled with a $7 million payment to government authorities. Ultimately, all related criminal and civil charges were dismissed.

By 1994, the chain expanded to 154 stores with sales totaling $618 million and acquired competitor M&R. Between 1996 and 1997, Arbor added another 30 locations.

By 1997, pharmacy operations represented 51% of total revenue. In 1998, Arbor Drugs held an eighth-place ranking nationally with a market share of 48% in Detroit and 45% in Ann Arbor. The chain operated 207 stores across southeastern Michigan at this time. Revenues for 1997 reached $962.8 million.

On February 9, 1998, CVS Corporation announced its intention to acquire Arbor Drugs in a transaction valued at approximately $1.48 billion, creating the largest drugstore chain in the country. The acquisition was completed two months later. While most former Arbor locations were rebranded as CVS stores, some were eventually closed by CVS Corporation.

Post-acquisition, Eugene Applebaum joined CVS’s Board of Directors and played a role in overseeing new store development in Michigan and Toledo, Ohio.