Friday, April 10, 2015

Walgreens To Close 200 Stores

Walgreens Boots Alliance announced in its 2015 Second Quarter results yesterday that it will close 200 stores in the U.S. as part of a cost-reduction initiative that the company started last year.

The store closures are in addition to a three-year, $1.0 billion cost-reduction initiative that the drugstore giant previously announced in August 2014. The company stated that it had identified additional opportunities for cost savings, primarily in its Retail Pharmacy USA division. Walgreens Boots Alliance predicts that those additional opportunities will increase the total expected cost savings program by $500 million to a projected $1.5 billion by the end of fiscal 2017. 

In addition to closing 200 stores, the company plans to reorganize its corporate and field operations in the U.S. while also driving operating efficiencies and streamlining information technology and other functions.  Walgreens Boots Alliance estimates that total pre-tax charges associated with this program to its GAAP financial results will be between $1.6 billion and $1.8 billion, of which the cash component is expected to be approximately 60 percent.