WOONSOCKET, R.I. — CVS Caremark Corp. has agreed to acquire Miami-based Navarro Discount Pharmacy, the largest Hispanic-owned drug chain in the United States.
The acquisition will give CVS Navarro’s 33 drug stores and Navarro Health Services, a specialty pharmacy that serves patients with complex or chronic diseases. The company generates annual sales of more than $340 million. The Navarro family began the business in Havana in 1940 and relocated to Miami in 1961 after the conclusion of the Cuban Revolution.
In an unusual move for CVS, the acquired stores will retain the Navarro banner, a decision that makes sense in view of the strong equity and recognition of the Navarro brand in Florida’s Hispanic community.
The stores have established a solid customer base and strong loyalty with their distinctive product assortments and services including designer fragrances, wireless phones and Navarro’s private label line, Via Mida. However, a particular strength of the chain is that it does not cater exclusively to Cuban-Americans.
Juan Ortiz, president of Navarro, said in a published report last year that as a community pharmacy, the chain addresses the needs of its clientele in specific locations. In Miami the demographic base tends to have Cuban, Puerto Rican, Dominican, Haitian and African-American roots. Other locations serve different segments.
For example, the Navarro store in Homestead has a significant Mexican-American customer base. The Pembroke Pines location, on the other hand, serves Venezuelan and Puerto Rican consumers.
“The acquisition of Navarro will strengthen CVS/pharmacy’s position in the Hispanic marketplace, the fastest-growing demographic in the U.S., and we are excited to be adding the Navarro brand to the CVS/pharmacy family,” said Helena Foulkes, president of CVS/pharmacy.
Given CVS/pharmacy’s scale and reach, the combination would not seem to be a huge step, but the acquisition will significantly boost CVS’ share of the Miami/Fort Lauderdale/Pompano Beach market area, where Walgreen Co. has held a commanding lead heretofore. Florida’s 4.4 million Hispanics constitute nearly 20% of the population as well as a vital bloc of consumers.
“Like CVS/pharmacy, Navarro is committed to improving patient health and providing individualized attention,” Ortiz said in a statement. “The combination of our stores will continue our tradition of excellent pharmacy care and high-quality products.”
As Foulkes noted, the continued rapid growth of the Latino population makes it an important market segment. With a current count of about 53 million, the number of Hispanics in the country is projected to hit 128.8 million by 2060. Moreover, states with particularly high Latino populations, such as California, Texas and New York, are also among CVS’ most important markets.
The Navarro acquisition follows CVS’ February 2013 entry into the Brazilian market with its acquisition of Drogaria Onofre, then the country’s eighth-largest drug chain with 44 stores. The terms of that deal were not disclosed.
“We view Brazil as an attractive market, given that health care and pharmacy are expected to grow by double digits over the next decade,” said CVS president and chief executive officer Larry Merlo at the time the acquisition was announced.