High street blow as 200 Boots shops face closure
Boots, one of the best-known names on Britain’s high streets, could close more than 200 shops over the next two years in a fresh setback for the beleaguered retail sector.
The company, which is owned by Walgreens Boots Alliance, the giant US pharmacies group, confirmed yesterday that it was reviewing its store portfolio amid falling sales and profits
Boots is the latest retailer to consider slimming down a big stores portfolio under pressure from digital rivals, soaring business and labour costs, historical lack of investment and poor customer service and product availability. Sir Philip Green’s Arcadia and Marks & Spencer are among those also overhauling their estates.
Boots sells items ranging from prescription drugs and cold remedies to shaving foam and bath salts. Its own-branded products include No 7, Botanics, Liz Earle and Soap & Glory.
The company, which has 55,000 UK employees, including 6,500 pharmacists, was founded in Nottingham in 1849, when John Boot opened a store selling herbal remedies. Today it has 2,485 Boots stores and 618 opticians, as well as 503 Hearingcare stores in a joint venture with Sonova, a Swiss group.
It fell into the hands of Walgreens in 2014 when the retailer bought Boots Alliance, the Anglo-Swiss pharmacy group. Walgreens, which is now run by Stefano Pessina, 77, the Italian tycoon, has 18,500 shops in 11 countries but makes most of its money in the United States.
News of the potential Boots closures and the number of shops involved was first reported by Sky News.
The retailer said in a statement that it was reviewing its store portfolio, although it insisted that there was no formal closure scheme in place and it could not comment on numbers.
Boots UK said in a statement: “We currently do not have a major programme envisaged, but, as you’d expect, we always review underperforming stores and seek out opportunities for consolidation. As is natural with a business of our size, we have stores opening, closing and relocating on a regular basis, but we have had around 2,500 stores open for several years now.”
Boots UK said that it was investing in its stores, having last year completed a “huge merchandising project to update our self-selection cosmetics areas in 2,200 of our stores”. It added: “We have recently announced the planned opening of a new store in Covent Garden, London, and the reinvention of our beauty business in 24 stores across the UK. We are being realistic about the future and that we will need to be agile to adapt to the changing landscape.”
The group’s British operations are run by Seb James, the former Dixons Carphone chief executive, who joined in September as senior vice-president and managing director. He said recently that he was taking “decisive steps” to cut costs, including cutting 350 jobs at its had office in Nottingham while considering store closures, partly through lease expiries. Most retail staff affected are expected to be redeployed to neighbouring stores.
Mr James, 53, is revamping stores to sharpen the distinction between the three main businesses: pharmacy, medicines and first aid; vitamins, supplements and holistic remedies; and make-up and creams. “We have been a supermarket for all these things,” he told the Daily Mail, “so there were some quite uncomfortable juxtapositions. You might have had expensive cosmetics next to incontinence pads.”
In the year to the end of August, Boots UK, excluding the opticians and hearing stores, suffered a 22.3 per cent fall in pre-tax profits to £391 million, while revenues fell by 2.3 per cent to £6.8 billion.
Investors wiped $7.5 billion off the value of Walgreens in April when it slashed its full-year profit forecast and reported another poor quarter by Boots UK.
Source: TheTimes UK