CVS Corp., the No. 2 U.S. drugstore
chain by revenue, plans to close 160 Eckerd stores this year, or
about one-eighth of the locations it acquired from J.C. Penney
Co., to eliminate the least profitable outlets.
The company expects to complete converting 1,100 Eckerd
stores to CVS locations by July, Chief Executive Tom Ryan said at
a meeting with analysts and investors in New York Wednesday. He didn’t say
how many jobs would be lost because of the closings.
CVS said before completing the $2.15 billion Eckerd purchase
in July that it might close as many as 225 locations where sales
lag. The company bought about half the Eckerd chain, mainly to
expand in Florida and Texas, and Eckerd’s mail-order prescription
business.
“This is probably going smoother than anything we’ve ever
done,” Ryan said of the company’s integration of Eckerd.
CVS, with more than 5,450 stores, became the No. 1 drug
chain by number of stores with the acquisition. Walgreen Co. is
No. 1 by revenue and No. 2 by number of stores.
The company also will close an Eckerd distribution center in
Garland, Texas, in next year’s second quarter, Kevin Smith,
senior vice president of supply chain and logistics at CVS, said
at the meeting.
CVS is putting 90 Eckerd stores a week on its inventory
system and has completed 450 conversions, Ryan said. Remodeling
stores and changing the name to CVS will take longer. About 300
Eckerds, mainly in Florida, will be CVS stores by year’s end, he
said.
Bloomberg News
