CVS, the “Consumer Value Store”, could more appropriately be called the “Commonly Vacant Store”. According to Sprawl-Busters research, the drug store chain had a total of 345 empty stores across 26 states, totalling 3.12 million square feet of dead space as of July, 2002. The company adopted an “active relocation program” as part of its corporate “action plan”, which was designed to streamline operations” by shutting down 229 “surplus” stores by April of 2002. These closures stemmed from the corporation’s decision to switch its development model to “free-standing stores”, not because the buildings were obsolete. “Since these locations were leased facilities,” CVS told the Securities & Exchange Commission, “manaagement planned to either return the premises to the respective landlords at the conclusion of the lease term, or negotiate an early termination of the contracted premises.” By April of 2002, CVS had closed all these stores, and showed a $227.4 million charge on its books for “noncancelable lease obligations extending through 2024.” CVS has opened and shut stores like a flue on a furnace. It’s all part of the company’s plans “to move our existing shopping center stores to larger, more convenient free-standing locations.” In July of 2002, CVS had 45% free-standing stores, but it hopes to reach 80% free-standing units — so more closings are coming soon to a neighborhood near you. Along with closing these stores, the company also pink-slipped 1,500 of its employees, and shut down a distribution center in Henderson, North Carolina. With the store closings, CVS had 3,959 retail stores as of July, 2002, which means the empty stores made up about 9% of its outlets. Here are the top ten states with empty CVS stores: Ohio, 83; Michigan, 40; New York, 34; Indiana, 28; Pennsylvania, 22; Tennessee, 21; Virginia, 17; North Carolina, 16; Georgia, 14; Maryland and South Carolina tied with 13. Ohio led the nation in CVS “dead space” with a staggering 864,430 square feet of dark stores. Michigan had 357,288 s.f. of former CVS space, and New York came in third with 220,476 s.f. of emptiness.
In 2002, CVS plans to open another 230 to 275 new stores, of which 100 will be relocations, and 150-175 will be new stores. As of today, the company has around 4,007 stores, which, because of all its streamlining, is still lower than its store count of 4,120 stores in July, 2001. The corporate lesson to be drawn from all this? Communities should not expect to form a long-term relationship with these chain stores. The “Commonly Vacant Stores” company is here today, and gone tomorrow. The CVS in your neighborhood is only one “Action Plan” away from moving. By the way, the CVS real estate people have a 154,282 s.f. warehouse in Oxford, North Carolina they’d love to lease, along with a few scattered apartments and condos. For more information on CVS dark stores in your state, contact [email protected]
