Magazine Article


CVS Switches Its Lab Business to Photo-Me International

Kis Photo-Me International has grabbed one of the brass rings in the industry by nailing a major account, CVS, to an agreement to supply minilab equipment to the 5,400 unit drug chain.

Mark Lawrence, director of marketing for Digital Portal, the U.S. representative for Kis Photo-Me, confirmed that a contract was signed providing for CVS to purchase the brand for new store openings, as well as for those stores that may be upgrading from optical to digital equipment or as leases expire. The one-year agreement commences on January 1.

Though it could not be confirmed, it is understood that the initial stage of the deal would involve about 700 systems.

A spokesman for CVS acknowledged the agreement but would otherwise not comment on the arrangement.

CVS has a long-standing relationship with Kodak going back to the early days when Kodak’s Qualex operation had lease-click arrangements with many major accounts. CVS installed a large number of Gretag systems under that deal, many of which are still in place in older CVS locations. With the collapse of Gretag, Noritsu stepped in as the equipment provider of choice to CVS using Kodak consumables. Noritsu has been the prime supplier to CVS until now.

Some months ago Kis Photo-Me and Kodak tied a knot providing for Kodak to add the Photo-Me line to its U.S. portfolio of recommended minilabs along with the Noritsu line. They already had a deal in Europe. In exchange, Photo-Me pushes Kodak consumables.

The new CVS arrangement apparently deals Noritsu out and brings Photo-Me in. Kodak’s position remains the same, as the supplier of paper and chemicals. In addition, Kodak will be providing some of the service for the Photo-Me systems, along with some of CVS’ own in-house service people acquired when they took over the Eckerd chain.

A Noritsu spokesman would offer no comment on the matter.

Mark Lawrence said that CVS would be using the firm’s DKS-1510 model with Photo-Me’s proprietary software. The system can output up to 800 prints/hr., and its 10-inch paper capacity can produce a 10x15-inch print. Among its features: automatic red-eye removal, 120 and APS capability, anti-dust and anti-scratch software, and the ability to archive 50,000 images. It carries a list price of $86,500.

The decision by CVS to select the DKS system was made after a trade-trial of six systems in stores in Las Vegas and Orlando.

Kevin Donohue, president/CEO of Digital Portal, said, “We are extremely pleased to be able to supply a prestigious firm such as CVS. We expect it will assist us in our pursuits to gain other major customers.”

Digital Portal has been very aggressive in its effort to break into a large mass account. Though it has placed a small number of systems in the U.S., the CVS deal represents a major breakthrough for the firm. With the acquisition of about 1,200 Eckerd Drug locations, now converted to the CVS brand, the chain’s website shows a total of 5,400 locations, though not all have lab setups. Walgreens’ website shows 4,953 stores for 2005 and forecasts 7,000 by 2010.

Kis Photo-Me, a UK company, currently produces the DKS minilab in a manufacturing facility in Poland. In a recent announcement, the firm indicated that it has an agreement to make some machines in Singapore. ptn