Boots poised for revival as Pessina and Sycamore prepare for market return

Stefano Pessina, renowned for building the Walgreens Boots Alliance empire, has set the stage for Boots to become a standalone company after the sale of WBA to US private equity group Sycamore Partners. Retaining a significant stake, Pessina and Sycamore chief Stefan Kaluzny have announced intentions to spin off Boots, with Pessina emphasising his family’s deep commitment to the retailer’s future. This commitment could serve as a positive force for the British high street stalwart, viewed as a trophy asset by both Pessina and Ornella Barra, now leading The Boots Group.

Not all observers are confident, however. Internally, there is concern that underinvestment may persist, and pharmacy operations might continue to overshadow growth opportunities elsewhere within the company. Over the last three years, WBA took dividends of £1.1bn from Boots while reinvesting just £527m. Critics suggest those funds would have yielded more value had they been channelled into store improvements. Some insiders now consider the control exercised by Pessina and Barra as potentially Boots’s greatest challenge moving forward.

Yet Boots has performed solidly, registering 17 consecutive quarters of market share growth, with last year’s profits up £40m to £450m on robust sales across beauty and health lines. The potential for a return to the stock market looms large, possibly as soon as late 2026, with Sycamore expected to exit and Pessina likely to retain his stake. The Pessina family’s affection for Boots ensures they see its future as their own legacy project. Despite market scepticism, associates insist the new structure will enable greater investment in Boots, with neither Pessina nor Sycamore expected to draw dividends for the time being.

Debate continues, as some within the organisation argue that Boots’s recent success is rooted more in brand strength than strategic leadership. Many stores remain outdated, with over two-thirds reportedly still requiring investment and refurbishment. Boots enjoys enviable leadership in beauty, haircare, and skincare, areas identified by analysts and former suitors as ripe for growth. Guy Hands, who nearly acquired the chain in 2007, continues to see vast potential if Boots leverages its advantages in beauty and healthcare and streamlines other less effective product lines.

The health division, meanwhile, faces tougher headwinds. Pharmacy closures across the country driven by low medicines reimbursement rates pose challenges, but government plans to expand pharmacy roles in NHS delivery may present lucrative opportunities in the longer run. Boots is well placed to capitalise as public policy moves in its favour, especially as the NHS seeks to alleviate pressures on general practice.

As conversations intensify in the City regarding a potential float, market participants believe patience could prove valuable. The current consensus suggests Pessina and Sycamore may opt to hold onto Boots for a few more years to maximise value ahead of an eventual Initial Public Offering. Pessina’s track record reveals a clear reluctance to relinquish control, branding Boots as more than a mere acquisition. After 175 years on the British high street, the chain stands on the cusp of renewal under its longstanding owner’s watchful eye—a testament to its durability and latent promise.