Walgreens Boots Alliance will shut 1200 stores over the next three years following a larger net loss in the last fiscal year.
Out of the 1200 stores, 500 are planned to be shut next year. The closures include the 300 stores previously approved under the company’s transformational cost management program.
“Fiscal 2025 will be an important rebasing year as we advance our strategy to drive value creation,” said Tim Wentworth, CEO of Walgreens Boots Alliance.
“This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term.”
Neil Saunders, MD of GlobalData, said that the store closures reflect how the company neglected the fundamentals of stores and retail operations while building the business through acquisitions in the past years.
“Cutting out the dead wood will help the company strengthen its financials over time, but it is effectively a huge admission of failure,” said Saunders.
“The closures will also raise concerns about the emergence of more pharmacy deserts.”
Last fiscal year, Walgreens Boots Alliance’s net loss stood at $8.64 billion, worsening from $3.08 billion.
This is despite its sales growing 6.2 per cent to $147.66 billion as its US retail pharmacy’s sales increased 5.0 per cent to $115.78 billion.
US healthcare sales soared 27 per cent to $8.35 billion, while international sales jumped 6.1 per cent to $23.55 billion.
“In fiscal 2025, we are focusing on stabilizing the retail pharmacy by optimizing our footprint, controlling operating costs, improving cash flow, and continuing to address reimbursement models to support dispensing margins and preserve patient access for the future,” said Wentworth.
