CVS Corp. (Woonsocket, R.I.) has announced plans to shut 200 stores in 2002, in the wake of its poor third quarter reports.
The drugstore chain confirmed that its net income for the third quarter ending Sept. 29, 2001, had fallen nearly 30 percent and warned that its fourth quarter income will be much lower than expected. The retailer blamed much of the income drop on the increase in people ordering prescriptions by mail and from a lack of new drugs being introduced this year. Prescription sales account for more than 60 percent of the company's revenues.
Third-quarter sales were up 10.1 percent to $5.4 billion, and same-store sales were up 7.6 percent.
“We have completed a thorough analysis of our business and are today announcing a series of actions,” said ceo Tom Ryan. “These steps will better focus our company on leveraging substantial opportunities.”
At the same time it announced its upcoming store closings, CVS announced that it is moving forward with aggressive new-store plans in the Dallas-Fort Worth metroplex. “By the end of 2001, we plan to have six new stores open in the Dallas-Fort Worth and Houston markets,” said CVS spokesman Todd Andrews. “We see the Dallas-Fort Worth area as an area with high growth potential and we are very enthusiastic about our plans to continue to expand in that market.”
CVS is one of the two largest drugstore chains in the U.S. It fills more prescriptions and operates more drugstores [4100] than any other. Only Deerfield, Ill.-based Walgreen's rivals it in total sales.