A true original
Only two film companies have ever gained a spot on the Dow Jones Industrial Average in over a century of the index’s existence. The first, which found its place all the way back in 1925, got its start a mere 13 years earlier, on May 8, 1912, as the Famous Players Film Company. It operated for only four years before merging with a competitor to become Famous Players-Lasky. This new company used a familiar name to release its films: Paramount Pictures Corporation.
Lasky, under the guidance of Famous Players founder Adolph Zukor, grew quickly into a production and distribution powerhouse in an era that offered few serious rivals. By the 1920s, the company’s Public Theatres subsidiary was a nationwide chain of over 1,000 screens. The industry-straddling Famous Players-Lasky (soon to be renamed Paramount Famous Lasky) joined the Dow in 1925, and it would remain a component until 1932. By this point the Great Depression had nearly killed Paramount, and a year later it fell into receivership, hanging on for another two years before collapsing into bankruptcy.
Paramount’s post-bankruptcy recovery was so impressive that the company soon regained the vanguard of the motion-picture industry, from which it used its vertically integrated model (production, distribution, and screening) to control much of what the American public saw when it went to theaters. This dominant position made Paramount the first named defendant in the federal government’s landmark antitrust case against seven major motion picture studios. This case, decided in 1948, separated Paramount from its theater chain and ended the era of the big studio.
Paramount declined in the post-antitrust era, and was bought out in 1966. This marked a revival for the company as a producer of quality films, as the years following its buyout saw the release of smash hits The Godfather, Chinatown, and Saturday Night Fever, among others, and also began Paramount’s successful foray into television when owner Gulf + Western acquired Lucille Ball’s Desilu, gaining the Star Trek franchise in the process. By the 1990s, Paramount was firmly (re)established as a top production company, which led to a bidding war eventually won by Viacom, Inc. (NASDAQ:VIAB) in 1993.
The right prescription for growth
The first CVS Caremark Corporation (NYSE:CVS) opened in Lowell, Mass., on May 8, 1963. It was initially known as “Consumer Value Stores,” hence the CVS Caremark Corporation (NYSE:CVS) acronym, and was a health and beauty retail chain until 1968, when the first pharmacy departments popped up in some of the company’s 40 locations. That same year, the Melville Corporation (a leading shoe retailer) acquired CVS Caremark Corporation (NYSE:CVS), which made the drugstore chain only a small part of a very large retail organization. In 1974, CVS Caremark Corporation (NYSE:CVS) made up less than 15% of Melville’s total sales, despite operating over 200 stores, of which 45 contained pharmacy departments.
Melville and CVS Caremark Corporation (NYSE:CVS) grew through the 1980s, and by 1989 the parent company accounted for 23% of its revenue from shoe stores, but drugstores (which included other brands at the time) comprised 28%. However, the 1990s brought some difficulties – all of CVS’ California locations were sold in 1992. After further retrenchment and restructuring, Melville decided to refocus on CVS Caremark Corporation (NYSE:CVS), which it merged with its Peoples Drug Stores brands in the mid-90s to create a 1,350-store chain generating $4.3 billion in annual sales in 1994.
After spinning off most of its other retail outlets, Melville adopted the CVS name as its corporate identity in 1996. By the turn of the century, CVS had bought two competing drugstore chains, and by 2004 it had also acquired a bankrupt rival and most of Eckerd’s pharmacies. CVS continued to acquire smaller rivals throughout the decade, and by the time the company was ready to celebrate its 50th birthday – that’s today, by the way – CVS had grown into the largest pharmacy chain in the United States, with over 7,400 stores that help fill or manage over one billion prescriptions each year.
The article The War Was Over, but These 3 Companies Were Just Getting Started originally appeared on Fool.com and is written by Alex Planes.
Motley Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology.The Motley Fool recommends Coca-Cola.
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