Boots, the parent company of Boots high-street pharmacy, will close 1,200 stores in America in the next three year as it struggles with a decline in consumer spending rates and low reimbursement rates for drugs.
Walgreens Boots Alliance, which operates over 8,700 Boots stores in the US as well as 2,000 Boots pharmacies across the UK, announced the closures to help the new CEO Tim Wentworth return the group back to growth.
He said that the 2025 fiscal year, which started last month, is an important “rebasing” year for the chain. He said that the turnaround would take some time but was confident that it would yield financial and consumer gains over the long-term.
Tim Wentworth, the chief executive of the group, is working to bring it back to growth
The announcement came along with the fourth-quarter results which were slightly better than Wall Street’s lower estimates. The group’s earnings for the full year were in line with the expectations, while Boots (the UK division) posted its 14th consecutive quarter sales growth.
Walgreens stock, which fell by 65 percent this year, and is now trading at near 30 year lows, rose $1.44 or 16 percent to close at $10.44 on Wall Street. Michael Cherny, analyst at Leerink Partners, said that “at first glance, the forecast looks better than the worst-case scenarios.”
WGA began this financial year by reducing the dividends it pays to shareholders. The company then reduced its profit forecast for the full year, after reporting net losses of $5.6 billion during the nine-month period ending in May.
The pharmacy chain posted a loss of $3 billion for the fourth quarter compared to $180 million in the previous period. The main reason for this was the $2.3 billion noncash writedown related to CareCentrix, its homecare unit and investments in China.
Boots, one of the company’s most successful assets, is now uncertain about its future due to the troubles at the US division. Retail sales grew by 6.2 percent in the fourth quarter. This was largely due to skincare and beauty.
Sebastian James is the new managing director at Boots UK, who will be succeeded by Anthony Hemmerdinger in the next month. He said: “We are experiencing positive momentum throughout the business. Healthcare and innovative beauty products are now performing well together.”
“As I prepare the handover of the leadership baton to Anthony, I’m confident that I will leave the business in a solid position. The company is well-positioned to continue its exciting transformation.” It’s been an honor to lead Boots over the past six years, and I am incredibly proud of my team for all they do to keep Boots relevant today just as it was more than 175 years ago.
WBA has been urged to separate its business from its UK-based retailer and focus on the domestic market since 2022 when it scrapped its sale plan. WBA began to consider a possible sale of the UK-based retailer last year. These plans, however, have stalled due to the weaker market conditions.
WBA’s struggles have a major impact on Stefano Pessina. Its founder and chairman. Bloomberg estimates Pessina’s networth at $6.4 billion. This is down from $15.4 billion when he was first listed in July 2015.
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