As CVS/pharmacy moves forward with its planned expansion into southern markets, the retail chain has no plans to uproot its Rhode Island ties and says its Woonsocket headquarters offer plenty of space for the administrative support it will be adding in the future.
The early April deal announced for the acquisition of more than 1,200 Eckerd drugstores located mainly in Florida and Texas made CVS the largest pharmacy retailer in the United States.
The agreement will see CVS grow to nearly 5,500 locations in 36 states, and jump past competitor Walgreen Co., which has a storefront tally a bit under 4,400. On the heels of the deal – expected to be completed this summer – CVS announced plans to add 250 jobs to its headquarters over the next several years.
The tax incentives that encouraged CVS to expand its Woonsocket facility more than five years ago have done their job – making it feasible for the company to continue overseeing its growth from a Rhode Island vantage point.
Mike DeAngelis, a spokesman for CVS, said the retail pharmacy chain’s 2000 expansion in Woonsocket had all but guaranteed the company’s headquarters would remain in Rhode Island for “the foreseeable future.”
The “store support center,” located in the Highland Industrial Park, contains more than 500,000 square feet of office space in a campus-like environment with a series of interconnected buildings.
Susan D. Menard, now in her ninth year as Woonsocket’s mayor, said the company remains the town’s biggest taxpayer while stressing the value of the quality jobs that the retail chain has brought to a now fully occupied industrial park.
“Nothing is forever,” Menard said. “But after they made that decision four years ago, I felt very confident that CVS would continue to be part of Woonsocket for a while.”
In 1998, CVS first announced that, largely due to tax incentives from the state and Woonsocket, it would continue operating from Rhode Island – and in the process agreed to add 700 jobs over the next seven years while tacking on a 270,000-square-foot expansion to the existing headquarters.
While the company admitted at the time of groundbreaking that it had considered other states for a potential relocation, in the end company officials said it made business sense to stay where they were and take advantage of the state’s 10 percent investment tax credit, the highest in the country at the time. CVS also benefited from many sales tax exemptions for the purchase of building materials and office equipment because it worked with the state’s Economic Development Corporation.
Tom Ryan, CVS president and chief executive officer and a graduate of the University of Rhode Island, has also kept a visible presence in the state, taking pride in his local ties and offering both corporate and personal contributions to many local charities and causes.
Menard said the city’s own economic development department continues to be in direct contact with the company and noted that should CVS ever require another expansion, the company owns enough land to make that happen.
“When it comes to CVS, whatever they want, they get,” Menard said.
“We feel that way about all of our businesses and we work hard to retain all of our businesses.”
Within two years of the addition, CVS had added more than 900 employees to the state’s work force, relocating hundreds of workers from smaller offices in Massachusetts, and beginning expanding into new markets such as Florida and Chicago, DeAngelis said.
Following a few acquisitions, a 2001 consolidation of some of the company’s facilities included the closing of a North Carolina distribution center and a mailing facility in Ohio, and a couple hundred layoffs eventually trickled down to Woonsocket, though today the company’s employment in Woonsocket stands at more than 2,000 workers.
“There’s plenty of room,” said DeAngelis of company headquarters. “These 250 jobs are going to come over the next one to three years and be spread through a variety of departments as the Eckerd stores and new stores come on line. We have room for them.”
David Magee, an Atlanta-based analyst who follows CVS for SunTrust Robinson Humphrey, said it makes little difference where the chain is based.
“I don’t think there’s any meaningful difference,” said Magee, noting that CVS executives have access to private planes should they need them. “A lot of firms are based in New York and operating in the South or the Midwest without problems. CVS hasn’t had any problems doing the same from Rhode Island.”
