Walgreens Closing 200 Stores In Cost-Cutting Drive
Walgreens Boots Alliance Inc. will close about 200 of its 8,232 drugstores in the US in an attempt to reduce costs and increase profits that perviously plummeted due to stronger competition and lower reimbursements from pharmaceutical insurers.
The company plans on revamping its technology and reorganizing all corporate and field operations which is predicted to cut an additional $500 million by the end of 2017. Investors welcomed the proposed changes.
Interim Chief Executive Officer Stefano Pessina intends to adapt the U.S. drugstores to the model of European Boots stores with a new longterm plan that reduces expenses and makes stores more attractive to consumers and suppliers the same time.
Pessina, who’s also the company’s largest shareholder, has replaced executives and telegraphed his interest in U.S. deals. Rite Aid Corp. is seen as a possible target, Peter Drippe of Visium Asset Management LP, said earlier this month.
Walgreens fiscal profit for 2015 is estimated to be $3.45 to $4.65 a share for the fiscal year according to a Walgreens statement issued on Thursday. Analysts had estimated $3.60 on average, according to data compiled by Bloomberg.
Bloomberg News, edited by ESM