CVS to shut some unprofitable shops because it expands new HealthHUBs .
A pedestrian passes a CVS retailer in New York.
Scott Mlyn | CNBC
CVS Well being will shut some unprofitable areas because it redesigns about 15% of its 9,800 shops to focus extra on well being providers, a high govt mentioned on the firm’s investor day assembly in New York on Tuesday.
CVS plans to transform 1,500 areas by 2021 into its new HealthHUB format, which provides providers like well being screenings and blood assessments. It additionally plans to open new shops in “high-growth markets” in addition to in areas of the nation the place it would not have a lot of a presence, just like the Pacific Northwest, CVS Pharmacy President Kevin Hourican mentioned.
“We will also close stores,” he mentioned, noting that CVS shuttered “a couple hundred” up to now few years after the corporate stopped promoting cigarettes in 2014 and misplaced the majority of gross sales there. Leases on roughly 500 areas come up for renewal yearly and are frequently reviewed to see how worthwhile they’re, he mentioned.
“As these stores come due, we will closely evaluate our best financial options for those specific locations, with the goal of improving our overall productivity of our fleet,” he mentioned.
CVS in Could mentioned it determined to shut 46 underperforming shops. Hourican instructed CNBC in a separate interview Monday that he doesn’t anticipate any “meaningful” retailer closures this yr.
“When our leases are up for renewal … we will evaluate each and every single one of those locations to determine the best possible outcome for the overall environment from a profit improvement perspective,” he mentioned.