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Unions Approve Agreements with Duane Reade

NEW YORK -- Duane Reade Holdings, Inc. said yesterday that the Allied Trades Council Division of Local 338 RWDSU/UFCW and Local 340A New York Joint Board UNITE HERE! have ratified the new three-year collective bargaining agreements reached this week.

Consequently, the company has resolved all outstanding litigation and disputes with both the Local 338 and the National Labor Relations Board.

Under the settlement with Local 338, Duane Reade doesn't have to make any cash payments to the union benefit funds, will have only a limited contingent obligation going forward, and will stop making an annual $4.4 million provision related to outstanding legal matters involving the union labor litigation. As a result, the company expects to record a one-time noncash pretax benefit of about $18.3 million in the first quarter of 2006 to reduce its labor contingency reserve, which was $20.7 million as of Dec. 31, 2005.

The collective bargaining agreements with both unions cover all of Duane Reade's clerks, cashiers, pharmacy clerks, pharmacy technicians, and photo technicians; and are effective from April 1, 2006 through March 31, 2009.

Duane Reade, the largest drug store chain in the metropolitan New York City area, operates over 250 stores.
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