005 CBM 1215 profile_Passed_Layout 1 23/11/2015 11:59 Page 5

CVS RETAIL PROFILE

CVS Health is one of the largest health and beauty retailers in the US. The CVS group CVS operates four divisions: CVS Pharmacy, which is the second largest pharmacy chain after after the RIGHT ON () chain in the US; CVS MinuteClinic, which comprises some 900 walk-in medical clinics that are usually located TARGET within CVS Pharmacy stores; CVS Specialty, a department that deals with patient treatments for With over 7,800 stores in 44 US states, CVS rare and complex diseases; and CVS Caremark, a pharmacies serve five million customers each Pharmacy Benefit Manager (PBM). PBMs are third day. Annemarie Kruse finds out how it has party companies that act as an intermediary between a health insurance company and the been investing in its own label beauty brands insured individual, mostly processing and managing drug prescription claims. According to the company some five million The first CVS store – the acronym CVS stands customers visit CVS pharmacies each day. The for Consumer Value Stores – was founded in 1963 stores sell prescription drugs, OTC medication in Massachusetts. Six years later the CVS chain and supplements, beauty and personal care was sold to . Over the next products, convenience foods, confectionery and decades CVS expanded, acquiring smaller drinks. The majority of CVS stores are a pharmacy and drugstore chains across the US. In combination of drugstore and pharmacy and 1994 CVS introduced a PBM service, followed by these outlets also offer basic health care services the introduction of ProCare in 1997 and the first like flu vaccinations. The prescription drug walk-in clinic in 2000. business accounts for the majority of turnover in In 2007, CVS Corporation and Caremark RX the retail division. merged to become CVS Caremark. And in 2014 CVS Caremark was renamed CVS Health in Beauty in focus order to highlight its pharmaceutical and medical Besides the usual cosmetic and personal care background. The CVS group has performed well retail brands, the company’s proprietary beauty over the last years: for fiscal year 2014, CVS brands include Essence of Beauty, a bath and Health announced group net revenue of body care range, the Skin+Pharmacy facial skin US$139,367m, up 9.9%. The pharmacy retail care range for younger and problem skin and the section accounted for turnover of $67,798m, an increase of 3.3% compared to 2013. Fact file: CVS CVS’ retail division currently operates over 7,800 stores in 44 US states, the District of Columbia, Founded 1963 Puerto Rica and Brazil. Besides the CVS Pharmacy Address One CVS Drive, Woonsocket, CVS Phamacy’s and CVS stores, the company’s retail division also Rhode Island 02895, USA turnover grew by 3.3% includes the drugstore chains , Contact telephone +1 800 746 7287 in 2014 to $67.8m Navarro Discount Pharmacy and Brazilian company Drogaria Onofre, in addition to the online stores Website cvshealth.com cvs.com, navarro.com and onofre.com.br.

December 2015 CBM 5 005 CBM 1215 retail profile_Passed_Layout 1 23/11/2015 11:59 Page 6

RETAIL PROFILE CVS

nail polish brand Pop-arazzi. Just the Basics is a The group also continues to invest in its beauty With the budget range of personal care, baby care and brands. In 2011, the company launched Nuance, a Navarro purchase, household essentials. beauty range developed together with actress “ Over the last decade CVS has been looking for Salma Hayek. The product portfolio of Nuance CVS is ensuring new ways to grow its beauty business. In 2008 the Salma Hayek currently offers some 100 skus, that its retail

group launched a new store format, Beauty 360. including facial skin care, bath and body care, hair business is

The Beauty 360 outlets were designed to cater to care, styling and colour cosmetics. reflecting current a more upmarket and sophisticated clientele, And in July 2014 CVS introduced Makeup “ offering a selection of high end and niche beauty Academy, a 145-sku range of make-up artist demographic and fragrance brands. Stores were staffed with inspired colour cosmetics and make-up tools. trends in its home trained professionals offering beauty advice and a Makeup Academy features some 100 lip products market range of beauty services in an extensive range of shades including mini-manicures, and textures, as well as a wide express facials and hand selection of false lashes and massages. make-up brushes and Initially CVS had high applicators. hopes for the new In bath and body care, perfumery chain and CVS launched a natural- announced that it would focused exclusive range of open 50 stores by 2009. Essence of Beauty products However, competition from in September 2014. The established perfumeries such Naturally Indulgent Bath & as Ulta and Sephora as well Body Collection, which is as the economic recession free from parabens, proved to be too much and in sulphates, phthalates, 2012 the chain’s 25 stores petrolatum and artificial were closed down. dyes, includes two scented However, CVS Pharmacy continues to lines formulated with plant extracts and essential position itself as a leading beauty destination, with oils: Lavender with Rosemary Oil and Eucalyptus high quality and fashion-forward brands, while with Mint Oil. also offering products at affordable prices. It continues to retail many designer and celebrity Retail relevance fragrances from brand names including White CVS is considered one of the more solid Diamonds, Versace and Burberry, and still sells a drugstore and pharmacy retailers in the US. range of beauty and make-up tools and accessories Its direct competitors are market leader under the Beauty 360 label. Walgreens and , the third-biggest chain on the market. However, Walgreens’ parent company is now busy integrating the new international division into its core business following the major corporate merger with UK CVS finds success in own health and beauty retail group Alliance Boots in label nail care December 2014. Nuance, an exclusive CVS brand which was CVS Health, on the other hand, is squarely developed together with Latina actress Salma focusing on its home market in the existing Hayek, has been one of the most successful business as well as its current acquisition strategy. CVS own label brands so far. On the colour In 2014, the company acquired -based cosmetics side Nuance offers a comprehensive drugstore chain Navarro, the largest Hispanic- nail care line-up of 19 skus. The range includes owned drugstore chain in the US and one of the a base coat, a top coat most important health and beauty retailers in the and 17 colour polishes in country’s Hispanic community. muted, natural colours. Another of CVS’s With the Navarro purchase, CVS is ensuring exclusive nail brands is that its retail business is reflecting current Pop-arazzi, a teen- demographic trends in its home market. The oriented line-up of over Hispanic community is a very important 70 nail polishes, demographic for any US retailer; CVS already including effect lacquers, has several product ranges and retail brands that sparkling top coats and cater to Hispanic consumers, including a partial four treatment polishes. selection of the Nuance Salma Hayek portfolio Other nail polish brands as well as ethnic beauty brand Milani Cosmetics. available at CVS stores CVS is also pushing forward its expansion into include Maybelline, Wet n the mainstream pharmacy market. In July 2015, Wild, Sally Hansen, CVS continues to the group announced that it had acquired Essie, Earthly Delights, expand rapidly, having Revlon, Kiss, L’Oréal Target’s pharmacy and clinic business for acquired Hispanic- Paris, Max Factor, OPI, $1.9bn. The 1,660 Target pharmacies in 47 US owned drugstore chain SensatioNail, Milani and states will be rebranded under the CVS Navarro in 2014 and CoverGirl. Pharmacy name, while Target’s 80 clinics will Target’s pharmacy and join the MinuteClinic roster. clinic business this year

6 CBM December 2015