Target Selling Pharmacy, Clinic Businesses To CVS Health
MINNEAPOLIS (AP) — Today, Target and CVS announced they are teaming up -- Target is selling its in-store pharmacies and clinics to CVS for $1.9 billion.
That means that CVS will be taking over more than 1,600 Target pharmacies, rebranding them, and operating them. Additionally, Target's 80 clinic locations will become MinuteClinics, and CVS is planning to open up to 20 more clinics inside Target stores.
Target is known as a store where you can find just about everything, and soon you'll find a CVS pharmacy
inside.
David Brennan is a marketing professor at the University of St. Thomas.
"I think it's a good deal for both," Brenna said. "It's a win-win situation."
He says the $1.9 billion deal allows Target to recover some of the losses it took from its poor-performing Canadian stores.
"It allows them to concentrate on what they do best, and that's fashion and uniqueness of their own brands," Brennan said.
But what does CVS get out it? According to Brennan, much higher profile.
"What it does is increase its distribution, and positions them in an above market position, relative to Wal-Mart," he said.
Brennan says Target's CEO is maximizing what the company does well, and letting go of what isn't as profitable.
"I think what Brian Cornell is trying to do is is fast track the organization -- get back to where it is, not just profitable for today but for the longer term," he said. "That amounts to getting rid of things that are not doing well, as in the case of Canada."
Some shoppers say they look forward to the convenience of having two of their favorite retailers under one roof. Janet Rivera lives in Apple Valley and shops at both CVS and Target.
"Oh that's amazing. I like it," she said. "It will make it easier to get my prescription filled."
Her son-in-law, Michael McHugh, also shared his thoughts.
"I don't think we will see a difference," he said. "The biggest difference is that Target will focus on what it does best: retail."
The agreement between Target and CVS is expected to be finalized by the end of the year. After that, it will take a few months for the pharmacies and clinics to make the transition.
Target employees will be offered similar positions with CVS.