CVS to close some unprofitable stores as it expands new HealthHUBs
A pedestrian passes a CVS store in New York.
Scott Mlyn CNBC
CVS Health will close some unprofitable places as it edits about 15% of its 9,800 stores to focus more on healthcare, said a senior executive of the company's New York investment day meeting on Tuesday.
CVS plans to transform 1500 sites by 2021 to its new HealthHUB format, which offers services such as health examinations and blood tests. It also plans to open new stores in "emerging markets" as well as in areas where the country does not have much presence, such as the Pacific Northwest, said CVS Pharmacy President Kevin Hourican.
"We will also close stores," he said, noting that CVS shuttered "a few hundred" in recent years after the company stopped selling cigarettes in 201[ads1]4 and lost most of its sales there. Leases of about 500 locations come up for renewal each year and are regularly reviewed to see how profitable they are, he said.
"When these stores are due, we will carefully evaluate our best financial opportunities for the specific locations, with the aim of improving our overall productivity in our fleet," he said.
CVS said in May decided to close 46 underperforming stores. Hourican told CNBC in a separate interview on Monday that he did not foresee any "meaningful" store closures this year.
"When our leases are on renewal … we will evaluate each of these sites to determine the best possible outcome for the overall environment from a profit enhancement perspective," he said.
