CVS Corporation
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CVS Corporation, NYSE: [CVS]
Name
CVS Corporation used to be known as Melville Corporation; CVS changed its name from Melville in 1996.The name once stood for Consumer Value Stores; though Tom Ryan, CVS's CEO has said he now considers it to stand for "Customer, Value, and Service".
The "pharmacy" part of the CVS store name comes from the chain's days as a regional Northeastern U.S. chain. CVS operated many convenience store-type stores without pharmacies, and the "/pharmacy" would be used to indicate the stores that had pharmacies. CVS now no longer builds stores without pharmacies, and many of the "CVS" stores (stores without pharmacies) have been phased out, though a few remain in New England, New York, and shopping malls.
Acquisitions and growth
Since 1990, CVS has been rapidly growing in order to become a national drug store chain.In 1990, it merged with the huge Peoples Drug chain of the Washington, D.C., area. Peoples Drug stores were then converted into CVS stores.
In 1997, when it had about 1,400 stores, CVS doubled its size by purchasing the much larger Revco drug stores, which had over 2,500 stores. Revco brought CVS into the Ohio Valley and Southeastern U.S.; previously CVS' footprint had not been south of Washington, D.C. CVS could afford such a large purchase because of its recent divesture of other retail companies such as Linens 'N Things, KB Toys, and Marshalls (see Melville Corporation).
Right after the Revco purchase, CVS acquired Arbor Drugs, bringing CVS to Michigan for the first time. In 2004, CVS purchased over 1,000 Eckerd drug stores from J.C. Penney; most of the former Eckerd stores that CVS purchased (and converted into CVS stores) were in Florida and Texas.
CVS has also been expanding its store base through new store openings. CVS entered the Chicagoland market in 2003, which at the time was dominated by Walgreens and Osco Drugs. In 2004, it has entered the California market, which is currently dominated by Longs Drugs, Rite Aid, and Walgreens. In the last few years, it has also opened stores in Las Vegas, Nevada, Houston, Texas, and Dallas, Texas, right before its purchase of Eckerd. CVS has also begun to open stores in Arizona.
On January 23, 2006, CVS announced that it had agreed to acquire the freestanding drug store operations of supermarket chain Albertsons. The deal included the acquisition of 700 drug stores trading under the Osco Drug and Sav-On Drugs banners, mostly in the Midwest and Southwestern United States with primary concentration of stores in Southern California and Chicagoland; and was formally completed on June 2, 2006.
CVS had previously operated stores in southern California and completely withdrew from the market in 1993. CVS sold virtually all of the locations to Sav-on Drugs then owner American Stores Company which operated the drug store division as American Drug Stores. Many of the stores in Southern California that CVS has acquired were formerly operated by CVS and most recently have operated as Sav-on Express stores. The Express name was used by Sav-on to help customers identify thoee stores that did not carry all lines of merchandise as compared to the larger traditional Sav-on Drugs location, hence the name Sav-on Express.
As a result of the acquisition, the chain now operates over 6,100 stores in 40 states and the District of Columbia. [link]
Controversies
Elensys
In 1998, the Washington Post reported that CVS appeared to be sharing prescription drug information with the Woburn-based marketing company, Elensys. According to the Post, Elensys received information on specific prescription drugs that individual CVS customers had purchased and used this information to send targeted direct mailings urging customers to renew prescriptions and promoting other products in which they might be interested. CVS and Elensys argued that there were no privacy issues because Elensys was acting solely as a contractor to CVS, and because the purpose of the mailings was to educate consumers. CVS claimed that it never shared customers' medical histories with Elensys (despite the Washington Post's indirect evidence that they had). George D. Lundberg, editor of the Journal of the American Medical Association, called the practice "a gross invasion" of privacy. Following a firestorm of criticism and complaints by consumers, CVS discontinued the practice.
Boston prescriptions
During 2005 a rash of prescription mistakes came to light in some of CVS' Boston-area stores[link]. An investigation confirmed 62 errors or quality problems going back to 2002. In February, 2006, the state Board of Pharmacy announced that the non-profit Institute of Safe Medication Practices (ISMP) would monitor all Massachusetts stores for the next two years. "CVS on notice after prescription errors". Laura Dannen and Associated Press. Boston Metro. 2006 February 10-12, p.2.Racial profiling
Rumors surfaced in May 2006 about CVS stores specifically protecting black and Hispanic hair products with their in-store security tags. The rumors were spread via e-mails and news stories. CVS countered the accusations, noting that the security tags are systematically placed on items based on their shoplifting frequency. When empty packages are found in stores, employees are to give them to managers, who then send them out to corporate. This information is used to determine which items are more prone to being shoplifted, and consequently, helps to determine which items have the in-store security tags placed on them. Different stores may have different items with security tags, based on such data, as shoplifted items and frequency may differ from area to area. Therefore, it is not racial profiling, since the issue is taken care of after the fact, as the security tags are placed on items after they have been determined to be high risk for shoplifting. Racial profiling, on the contrary, would involve the stores putting security tags on the multi-racial hair products before there was any evidence of them being shoplifted.External links
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