CVS Health plans to separate into two publicly traded companies, a change that could give beauty and wellness greater prominence in its retail business, according to industry analysts. The separation is expected to be completed in the first half of 2028, subject to customary conditions and approvals.
CVS Pharmacy will include about 9,000 retail pharmacies, mail pharmacy, MinuteClinic and the Health100 technology service business. Prem Shah, currently group president of CVS Health, is set to lead the company as CEO. A separate health care solutions business will include Aetna, CVS Caremark, CVS Specialty, Oak Street Health and Signify Health, and will continue to use the CVS Health name in the interim.
The plan reverses CVS’s strategy over the past two decades of bringing its retail pharmacy and health care operations together. Wendy Liebmann, CEO of WSL Strategic Retail, said the new structure could help CVS focus on retail sales, with health and beauty as core categories. Jump Accelerator founder Rohit Banota also sees a connection between CVS’s health care mission and beauty, wellness and longevity.
Banota said CVS could build on that opportunity by improving the in-store experience, making product discovery and exclusive offerings more prominent, and investing in personalized technology and product curation. CVS chairman and CEO David Joyner has said the separation would give each company more flexibility to choose technologies and respond to business and regulatory changes.
Analyst Jeffrey Ten said the split is unlikely to change store shelves immediately, but a stand-alone retail company may depend more on front-of-store categories to support margins. He said CVS could put greater focus on sales productivity, streamline assortments and expand private-label products. Brands that generate sales and store traffic could benefit, while those that do not may face greater pressure.
CVS has already made changes to its beauty and personal care offer under Michelle LeBlanc, vice president of merchandising for beauty, personal care and the Hispanic Strategy Team. The retailer has moved skin care closer to the front of stores, simplified assortments and tailored product selection to local markets. It also grouped men’s brands together; LeBlanc said those brands saw triple-digit growth. CVS has expanded training for beauty advisers, who now work in about 700 stores.
Products related to GLP-1 medications are another potential opportunity. CVS says people taking these drugs buy health and beauty products at higher rates, creating scope to connect them with complementary offerings, including hydration and skin care products.
Sources: WWD.