Officials with CVS Health announced plans Thursday to close 300 retail stores each year for the next three years while simultaneously adding more health services to its remaining locations.
The closings will begin in spring 2022. Officials did not immediately release a list of the affected stores.
The decision came as part of a strategic review of the company’s retail business. In a news release, CVS said the closures would ensure the company “has the right kinds of stores in the right locations for consumers and for the business.”
“Our retail stores are fundamental to our strategy and who we are as a company,” CVS Health President and CEO Karen Lynch said Thursday. “We remain focused on the competitive advantage provided by our presence in thousands of communities across the country, which complements our rapidly expanding digital presence.”
As part of a realignment of the company’s retail strategy, the company said it plans to add more health services to its stores, including dedicating some sites to primary care services, and to focus on products and services aimed at promoting “everyday health and wellness” in addition to its traditional pharmacy locations.
The company said that due to the planned store closures, it expects to see an impairment charge between $1 billion and $1.2 billion in the fourth quarter of 2021, or between 56 cents and 67 cents per share of earnings.
In a note to investors, Neil Saunders, a retail industry analyst and managing director of GlobalData, said the closures were caused by CVS having “too many overlapping locations,” CNN reported.
“Too many stores are stuck in the past with bad lighting, depressing interiors, messy merchandising, and a weak assortment of products. They are not destinations or places where people go out of anything other than necessity,” he said, according to CNN.
At the end of 2020, CVS had just over 10,100 locations nationwide, according to The Wall Street Journal. Since 2018, the company has opened about 200 stores while its rival, Walgreens Boots Alliance Inc., closed nearly 600 locations in that same time, the Journal reported.
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