Boots facing possible store closures

Health and beauty retailer Boots may be forced to close some of its stores after parent company Walgreens Boots Alliance experienced a “disappointing quarter”.

In its Q2 results, the company’s international retail pharmacy results showed that sales decreased 1.2% on a constant currency basis, mainly due to a 1.3% decline in Boots UK. This accounted for sales of $3.1bn (£2.3bn), a decrease of 7.1% on the same period last year.

Its UK comparable pharmacy sales decreased 1.5% and comparable retail sales decreased 2.3%, and it said Boots UK broadly maintained market share “amid weakness in its categories”.

The company said it would be “more aggressive” in responding to changing retail trends, which included optimising its store footprint and increasing its savings from $1bn to $1.5bn.

Boots has 2,485 stores across the UK and employs around 56,000 staff.

Executive vice chairman and CEO Stefano Pessina said: “The market challenges and macro trends we have been discussing for some time accelerated, resulting in the most difficult quarter we have had since the formation of Walgreens Boots Alliance.

“We are going to be more aggressive in our response to these rapidly shifting trends. We are focusing on our operational strengths and addressing weaknesses, making a number of senior appointments to bring change and accelerating the digitization and transformation of our business.”

He added: “This will include expediting the execution of our partnership initiatives, fully developing our in-store neighborhood health destinations, re-imagining our front end retail offering, optimising our store footprint and increasing the annual savings goal of our transformational cost management program from in excess of $1bn to more than $1.5bn.

“As a result of these actions, our business model will deliver improved performance in fiscal 2020, positioning us for mid-to-high single-digit growth in adjusted EPS in the following years.”