Boots to close hundreds more stores as online booms, no jobs to be lost
BootsWalgreens
The British health and beauty retail giant will close a further 300 stores across the UK in the next year, as its parent company continues to shape it into a profit-generating machine and speculation mounts about whether it will stay part of WBA.
The retailer had already been cutting store numbers in Britain and now plans to reduce the number from around 2,200 to around 1,900, focusing closures on those shops close to other Boots branches that are less profitable than those other branches.
However, perhaps in a reflection of how buoyant trading is at the business at the moment, it’s not planning any redundancies, so we assume that store staff will be redeployed to it stronger locations.
The company said that evolving its estate like this allows it to ensure that staff are where they’re needed, and that its investment will be focused “more acutely in individual stores with the ambition of consistently delivering an excellent and reliable service in a fresh and up-to-date environment”.
WBA had been planning to sell the Boots operation but ended the sale process last year amid suggestions that it was unable to achieve the premium price that it wanted, although there appeared to no lack of interest in buying the chain.
The performance of Boots hasn’t always been impressive in recent years, but more recent quarters have seen a strong recovery at the business, which suggests that a premium price might now be achievable.
This also comes as investors and board members of the parent company have been calling for a stronger focus on the US business and a fast divestment of the international ops. Of course, this doesn’t have to mean a sale as Boots could always be listed on the stock exchange.
The parent company hasn’t commented on the speculation.
But with sales soaring, we could see developments happening soon. Sales at Boots in the three months to the end of May rose 13.4% as beauty once again proved itself to be a resilient category, even in a cost of living crisis. While Boots also sells healthcare products, and services, it’s beauty and skincare products specifically rose 18%.
The company said online sales rose strongly too — further supporting its intention to close, less profitable stores. And while Boots has invested in making the environment to sell premium products more suitable, its Everyday essentials label saw volume growth of 40%, proving that, it can appeal across the price scale.
