Walgreen's Goes South

Mexico City's 400-year-old Casa de Azulejos (House of Blue Tiles) has been a private palace, the Jockey Club, the Russian Embassy, the Japanese Embassy, a dormitory for homeless newsboys, and, since 1919, the home of Sanborn's, most famous American business in Mexico. Last week the store in the old palace became the 416th link in the Walgreen drug chain. In its first venture outside the U.S., Walgreen's paid $2,500,000 to Ohio-born Frank Sanborn, 76, for the drugstore he founded 43 years ago with $10,000.

Walgreen's got far more than a drugstore. Sanborn's is now a restaurant. It also sells clothes,...