Signs declaring its headquarters a tobacco-free campus dot the parking lots. A wall in the lobby displays milestones throughout the company's history. CVS' acquisition of Aetna is the latest addition.
The larger company will control where consumers buy prescription drugs and walk-in health clinics, manage prescription drug benefits and offer health insurance. With those pieces together, CVS hopes to change how consumers access health care and to lower costs in the process. The growth of CVS comes at a time when the way Americans get access to and pay for health care is evolving quickly.
Surveys show that many of the estimated 30 million people who gained insurance coverage last year under health-care reform do not have a primary health-care physician or do not use one. And consumers in general are starting to demand more convenient, on-demand access to health care, closer to home. Where cigarette packs once lined up in neat rows, now there were nicotine gum and patches to help smokers quit.
There are no e-cigarettes either, much to the chagrin of that industry, which had hoped CVS would embrace its products as a lower-risk alternative. It also made economic sense. Adult-smoking rates have dropped to 18 percent in , from 43 percent in , according to the Centers for Disease Control and Prevention, and experts predict that rate to dip below 10 percent in the next decade.
Ditching cigarettes allows CVS to trade a small — less than 2 percent of revenue — and shrinking part of its business for an instant enhancement of its credentials in the faster-growing health and wellness space.
Before CVS went tobacco-free, negotiations with local health systems were awkward, Merlo said during a recent analyst conference call. A new partnership with Rush University Medical Center in Chicago will involve patient referrals and shared electronic-health records.
Anthony Perry, vice president for ambulatory care and population health at Rush, said traditional health-care providers and companies like CVS could be natural allies. Our company has grown and changed over the years, but our commitment to our customers, clients and communities has never wavered. Baxter taps its expertise in health care cost management to begin providing prescription benefit management services. As a division of Baxter, Caremark launches mail service pharmacy, IGIV home care services, and growth hormone distribution and services.
The Caremark formulary is developed and clinical intervention programs are introduced. The same year, Melville formed a European buying company. In Melville branched out further into nonshoe retailing when it bought Marshalls Inc. Expansion continued apace in , when Melville bought the unit Mack Drug Co. As part of a continuing trend, the footwear sales portion declined to 60 percent.
Upon Ward Melville's death in June , Francis Rooney, who already held the posts of president and chief executive officer, was named chairman of the board. The transition marked the end of an era and the beginning of a new one in which shoes would play an increasingly smaller role in the Melville scheme.
Shoes accounted for about 53 percent of the total. As the s came to a close, Melville continued to boom. In , Melville, with 48, employees and more than 4, stores, saw its 26th straight year of increased sales.
That year, Kenneth Berland was named to the post of president. By Melville, the largest U. In Melville added leather retailer Wilsons to its roster, and the following year it acquired home furnishings specialist Linens 'n Things, which had been founded in The firm began to phase out six of its seven shoe factories in late , eventually terminating about 2, jobs. In Melville sold the store Foxmoor chain, whose sales were declining. The same year, Melville shut down 72 Thom McAn outlets.
In Stanley Goldstein, the CVS cofounder who joined Melville when his corporation was acquired by the shoe giant, succeeded Berland as president and took his place as heir apparent. The following year, Goldstein was named chairman and chief executive officer, replacing the retiring Rooney.
To Goldstein fell the task of building on Rooney's phenomenal record. Rooney had transformed the firm from a successful shoe company into a diversified retailing giant.
Melville's expansion continued under Goldstein. In Melville underwent some structural renovation. The firm created a profit-sharing plan and an employee stock ownership plan, under which about 6 percent of the company's common stock was distributed among its employees.
The year brought to a close a remarkably successful decade, one in which sales and earnings both increased more than threefold. The Melville that left the s was vastly different from the one that entered that decade. In shoes, once the firm's mainstay, accounted for only The toys and household furnishing division accounted for the remainder of sales. This trend continued in , as Melville acquired more non-footwear retail outlets.
By the end of , Melville operated 7, stores and listed , employees on its payroll. Further expansion came in , when Melville acquired FootAction Inc. Retrenchment came to the fore in and , however, as Melville struggled in a more difficult environment for retailers. About of the Thom McAn locations were subsequently shuttered, as were of its 1, Kay-Bee stores and 75 smaller Linens 'n Things outlets. Of the closed units, about of them were converted to faster growing formats, most notably, FootAction.
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