Bartell Drugs CEO Kathi Lentzsch Sees Innovation as a Prescription for Success

This article appears in the September 2019 issue. Click here for a free subscription.

Kathi Lentzsch is just the second nonfamily member to lead Bartell Drugs, the iconic Seattle pharmacy company founded in 1890 when George Bartell Sr. purchased a pharmacy in the Central District. Bartell now operates 65 stores in the Puget Sound region and employs more than 1,700. Lentzsch, who was named CEO in January 2018, spent her first year focused on the business and is now spending more time networking and getting involved in the community. Lentzsch has spent her entire career in retail and worked briefly in Seattle about 30 years ago for Pier One Imports Inc. When I was here, it was a sleepy little port town, she recalls. Lentzsch, who lives in Seattles Capitol Hill neighborhood, recently made headlines when she hired armed guards at some of Bartells downtown stores and announced that the chain wouldnt open any more downtown-area stores due to safety concerns.

The risk we take every day with our customers and employees is huge.

Frankly, what kind of set me over the edge, every morning when I came in, there was an email that something had happened during the night or the day before, people getting hurt, cars running into stores. At one store, every time we got a window repaired, cars would run back through the window. We finally had to put wood up. It happened three times in one week.

We had somebody who landed in the hospital. Well, weve had a number of people land in the hospital. This particular one had surgery twice in December. I have another guy that was out for a year, a store manager. Something just happened yesterday. This is a regular occurrence.

We came out with the regulation that you were not to touch anyone or stop them. We really have a hands-off policy, which offenders know about. Ive been in a store and they are just so overt about what theyre doing. Theyll walk up to somebody that works in in a store and say, I know you cant do anything about this, and then theyll walk out.

Unfortunately, weve had to put a policy in place that theyll be fired if they do anything. That is heart-wrenching, gut-wrenching for me, because we had to terminate a couple employees who were with us for dozens and dozens of years. It feels like a conflict to me to do that.

I am so concerned something is going to happen to a customer. Customers see something happening and they want to jump in and help.

When people hear I came from San Francisco, they say, well, San Francisco is far worse. Im not sure I agree with that.

Almost anybody who comes in as a new CEO I would think would want to take at least six months to really focus on the business.

I did not come in to turn the company around. They brought me in for innovation. That was what I had done in a previous pharmacy situation. I think that was the reason. I dont know that they ever said that to my face.

They were very driven on innovation, being the first to do things. My view when I got here was that we had slipped a little on that, on the innovation side, which I think they realized.

Talk about innovation, they partnered with Amazon Prime Now before any drugstore had.

George Bartell, the grandson of the founder who was the CEO until 2016: His No. 1 focus was customer service.

The challenges of retail today are getting the customers attention. Thats probably top of mind for most of us in retail. How do we stand out?

When you get all these new people coming into Seattle for Amazon and Microsoft and all these places, where are they going to go? Most likely somewhere theyve heard of, so we have to figure out, as any retailer would, how to get in front of them.

We dont have an e-commerce site. You can refill a prescription on our site and thats it. Im not sure we should ever have a full-on Bartell e-commerce site.

Weve added an application to enable customers to see whats in our stores. They may not be able to buy it, but they can go online and search, and they can see whats in stores: inventory by location.

Were testing in three stores delivery of prescriptions. Were starting off with same day, were going to add next day and following day so it can be a little less expensive for folks. My ultimate goal is two hours, and we can do it.

Most pharmacies, 70ish percent of their business is the pharmacy. Bartell has always run at a lower percentage of prescriptions, which enhances the margin.

Part of the way I manage, I ask questions. Its the Socratic method. I just keep asking.

What havent I had to overcome? When I did get promoted for the first time, I didnt do anything differently. I kept beating the other two guys. They got promoted. I didnt. I simply changed how I dressed. I dressed more femininely but not provocatively. I dressed classy. Within six months I was promoted. The CEO came up and said finally, wow, I have an executive I can kiss. Theres been more egregious stuff.

I was a competitive swimmer from the time I was 10. And I swam into college. I think the first thing any sport does is teach you discipline and consistency.

I grew up in Virginia. Im the daughter of Yankees, as they say in the south, but my mother and father were both brought up in boroughs of New York City. I would hate to think what I might be like if I didnt have the Southern side to soften me.

Im a retail junkie.