Walgreens Set To Close 200 Low-Performing U.S. Stores, Open 200 New Locations
By Margaret Paulson in News on Apr 9, 2015 6:15PM
Chicagoland-based Walgreens announced today they will close 200 U.S.-based stores as part of a three-year, $1.5 billion cost-reduction plan. The original plan, announced last August, initially aimed to cut $1 billion by the end of 2017. But the $500 million expansion, announced earlier this morning by acting CEO Stefano Pessina, aims to make up for underperformance in U.S. pharmacy retail sales. The company also plans to restructure corporate operations and improve its information technology.
According to the Tribune, the closures represent 2 percent of all U.S. and U.S. territory Walgreens stores. However, Alex Gourlay, executive vice president of Walgreens Boots Alliance, clarified that the measure is about closing low-performing stores and “getting the right stores in the right places.” Gourlay confirmed that Walgreens will also open 200 new stores, though there’s no word yet where those locations will be.
The restructuring comes on the heels of the Dec. 31 merger of Switzerland-based Alliance Boots— the largest pharmaceutical wholesale company in Europe— and the US-based Walgreens. According to its site, Walgreens Boots Alliance is “the first global pharmacy-led, health and wellbeing enterprise in the world.”
The company is still finalizing the list of stores to close, but Pessina was quick to reiterate that the company is doing well: “This quarter marked a solid start for our new company and I remain as optimistic as ever about our long-term future." He suggested that Walgreens will likely be more proactive in the future, perhaps closing 10 stores per year if necessary, rather than having to announce a large amount of closures all at once.