Home » More 200 Walgreens stores to be closed
Industry News Retail

More 200 Walgreens stores to be closed

Walgreens

The closure is a part of the Transformation cost management program

Walgreens Boots Alliance will close more 200 Walgreens drugstores in the U.S. Earlier this year, as a part of transformation cost management program that has figured in hundreds of store closures in the U.S and it would directly hit the 1.9 Billions of earning of Walgreens.

Earlier this year announced, Walgreens disclosed plans to close 200 U.K. stores and also to shut more Rite Aid drugstores in the U.S. than originally expected. In April, executives said, initially Walgreens purchased 1,932 Rite Aid stores and planned to close up to 600 stores, but that number is growing to 750 stores.

Adding more stores to boost store’s traffic

During the filing of the U.S. Securities and Exchange Commission on 6 August 2019, Walgreens said, “Following a review of the real estate footprint in the United States, the company also plans to close approximately 200 locations in the United States.” Further, he said, “The Company currently estimates that the transformational cost management program will result in cumulative pre-tax charges to its GAAP financial results of approximately $1.9 billion to $2.4 billion, of which $1.6 billion to $2.0 billion are expected to be recorded as exit and disposal activities.”

On 7 August 2019, Rival CVS Health and Walgreens will announce its second-quarter earnings. Both the companies are trying to realign their stores in the U.S. by adding more health care services in order to boost their store’s traffic.

Program will help to drive a structural change in the company

In June 2019, during company’s fiscal third-quarter earnings regarding the transformational cost management program, Stefano Pessina, CEO of Walgreens Boots Alliance said, “Most importantly, this program will help drive a structural change in the company, making us a more efficient, more agile and more responsive organization.”

Further, he said, “It is expected to provide a significant portion of the funding required for our major technology upgrade and development investments.” “And, of course, an element of it will help to give us a bridge in our financial performance, as we restructure our businesses to better meet the needs of an ever more rapidly changing market.”