Historic downtown drugstore to close at end of January

Three months after selling its pharmacy business to a large corporate competitor, one of the city's last remaining independent drugstores is going out of business.

Citing the financial strain of slow reimbursement by government insurance programs, Albright & Raw Rexall Drugs sold its prescription business and drug inventory to Safeway at the end of September. It was a desperation move by owners Rick and Anna Mellen, who hoped the downtown store could survive on the strength of its other departments - gifts and sundries, a postal substation, and an old-fashioned soda fountain that opened last spring.

Their gamble didn't pay off.

"We're closing at the end of January," said Anna Mellen. "We just weren't making enough money without the pharmacy."

The couple bought the landmark drugstore at 259 S.W. Madison Ave. on Oct. 1, 2003, from longtime proprietor Ron Day, who still owns the building.

Rick Mellen, who never gave up his day job in information technology at Hewlett-Packard, worked in the pharmacy when he could, as did several of the couple's five children. Anna Mellen had worked for Day at the pharmacy for several years and knew the business.

But independent druggists face increasingly stiff competition from the chains, and the new owners faced other challenges as well.

A county contract to fill prescriptions for low-income residents provided supplemental income, but it proved a mixed blessing. Some longtime customers, frustrated by longer waits as the staff worked to fill the additional orders, took their business elsewhere. Then, after only about six months, the county canceled the contract, the Mellens said.

The biggest hit, though, came from Medicare Part D, the new federal prescription drug program. While Albright & Raw often had to wait months to get reimbursed for prescriptions by Medicare, pharmaceutical wholesalers insisted on being paid in a more timely fashion.

The Mellens' staff, which at one time numbered 22, has dwindled to eight, including daughter Jaime, 20, and son Adam, 26.

"We tried really hard to get this to go," Anna Mellen said. "I even took another job at another pharmacy to try to keep this going."

But after mortgaging their house, dipping into their retirement account and selling their stock, the couple finally decided to call it quits.

Albright & Raw will remain open through the end of January as the remaining inventory is sold off at a discount.

If you want one last ice cream soda, though, you'd better hurry. Today's the last day for the soda fountain. The store is closed Sunday for New Year's Eve, and there didn't seem any point in getting a 2007 permit from the county health department.

The Mellens are hoping to sell the fountain equipment and fixtures. They're also hoping another local business will take over the postal substation and hire Carol Steward, the woman who has run the operation for many years, to manage it.

So what will the Mellens do now?

"We go on working," Anna said. "Rick still works at HP, and I'm working at Pharmacy Express at the new Ray's Food Place in North Albany."

At least one thing is changing for the better, according to Rick Mellen.

"With the stress we've been through the last couple months, (closing is) almost a relief," he said. "I'm glad it's over."

Bennett Hall is the business editor for the Gazette-Times. He can be reached at 758-9529 or bennett.hall@lee.net.