CVS made a big announcement Thursday, saying they are closing 900 stores over the next three years, which amounts to almost 10% of their entire portfolio of stores.
Why? Well, buying patterns of consumers have changed, the company said, they want to make sure they have the “right kind of stores in the right locations for consumers and for the businesses.”
It’s going to cost CVS roughly $1 billion in the fourth quarter of this year to pull off this massive move. As for all those employees, well, the company said they would all have jobs at nearby locations if they want them.
Wall Street has a different and far less complex explanation as to why CVS is doing this. They claim it’s because the brand has too many overlapping locations and some stores are in such poor condition that they’ve become irrelevant.
Neil Saunders of GlobalData said this.
“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.”
The news was good for investors, as the stock price went up 1% Thursday, and overall in 2021, it’s up almost 40%.
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