CHICAGO — Walgreens Boots Alliance said Thursday it will close about 200 less-profitable U.S. Walgreens stores and open the same number of stores in new locations.
A spokesman told the Chicago Tribune on Thursday that the stores will close during the next three years, with the last closing no later than the end of 2017. The list of stores slated to close is still being completed.
The closings, announced along with quarterly earnings Thursday, will expand a three-year, $1 billion cost-reduction plan announced last August. The company now plans to cut $1.5 billion by the end of 2017 by also reorganizing its corporate operations and streamlining its information technology and other functions.
On a call with analysts, Alex Gourlay, executive vice president of Walgreens Boots and president of Walgreen, said the 200 stores that are closing will be replaced by about the same number of new stores.
“This really is (about) getting the right stores in the right places,” Gourlay said.
Acting CEO Stefano Pessina said he plans to have the company evaluate whether stores should close more often than Walgreen had in the past, to avoid announcing such a large number all at once.
“In the future, once we have created this new base, I believe we should every year review all the stores and if every year we have to close 10 stores … we will have to do it,” Pessina said. “It’s better to do this gradually over time.”
The store closings are 2 percent of the 8,232 drugstores Walgreens has in the U.S., Puerto Rico and the Virgin Islands.
Walgreens expects pretax charges for the restructuring of between $1.6 billion and $1.8 billion.
Nonetheless, the marrying of the nation’s largest drugstore chain, Walgreen, and Europe’s largest pharmaceutical wholesaler, Alliance Boots, on Dec. 31, boosted the company’s second-quarter earnings across the board.
Walgreens also said Wednesday it will pay a quarterly dividend of 33.75 cents per share June 12 to shareholders of record as of May 21.
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