CVS sees lean staff, new prototype in Peoples Drug's future

Drug Store News, Nov 19, 1990

CVS sees lean staff, new prototype in Peoples Drug's future

WOONSOCKET, R.I. - Plans to consolidate the Peoples Drug operation with CVS's will mean the elimination of a majority of office positions at Peoples' Alexandria, Va., headquarters, as well as the development of a new Peoples prototype that will differ from that of CVS, according to Harvey Rosenthal, CVS president.

"We've offered some people positions at Woonsocket, others will remain in Alexandria and other jobs will be eliminated," Rosenthal told Drug Store News. However, he stressed, consolidation will have no impact on "the vast majority of employees" - that is, Peoples' DC and store personnel.

Of the approximately 450 people currently working at Peoples' headquarters, about 30 have been offered positions in Woonsocket, and about 80 will remain in Alexandria, according to Peoples president David Eisenberg, who said all of these are middle-management and support positions.

Various office positions in Alexandria will be phased out from January through June, Rosenthal said, adding that "generous severance arrangements" have been made. He said Peoples' senior executives are staying on and helping through the transition.

As Rosenthal had indicated when the acquisition was announced early in July, Peoples "represents more than a region for us." Although Peoples will be integrated with CVS and be part of one company, it will have an identity and a level support commensurate with its size and differences from CVS. He reiterated that Peoples will keep its name.

The transition, to take place on a January-to-June timetable, will involve moving some functions to CVS headquarters here and keeping some in Alexandria. Functions scheduled to move to Woonsocket include accounting and finance, third-party prescription plans, warehouse purchasing and merchandising, information systems, human resources (administrative functions) and marketing. Peoples' legal department will shut down in March.

About 40 people will stay in Alexandria to handle point-of-sale, pharmacy systems and distribution systems. A small group will also remain to handle direct-vendor purchasing and related merchandising, pricing and promotional activities specific to Peoples.

Alexandria will become a regional office, with field-driven activities such as real estate, distribution, pharmacy supervision and field operations remaining basically unchanged, Eisenberg said. A regional human resources department will handle minority relations, hiring and the like.

A new Peoples prototype will be developed, which will differ from CVS's, because the Peoples stores are larger and have a broader merchandise mix, Rosenthal said.

"Our plans are to renovate the stores and introduce CVS merchandising techniques and decor," he explained. [See box, page 3.] However, he said, "We're a long way from identifying how similar and how different" the prototype will be.