Going through mounting losses, the Deerfield, Ailing.-based Walgreens, on Oct. 15 introduced the deliberate shuttering of about 1,200 places nationwide, over the course of the following three years. As CNN’s Jordan Vallinsky wrote on Tuesday, “Walgreens is closing roughly 1,200 places because the drug retailer chain struggles to take care of on-line opponents and declining prescription drug funds. By 2027, about one in seven Walgreens presently open will shut its doorways. About 500 Walgreens will shut its doorways over the following 12 months, the drug retailer chain introduced Tuesday.”
Vallinsky famous that “These closures characterize a major escalation from a couple of months in the past, when the financially struggling firm introduced in June it was shutting 300 underperforming places as a part of a multi-year optimization program underneath CEO Tim Wentworth. On the time, the corporate had mentioned a couple of quarter of Walgreens shops have been unprofitable, and the chain promised ‘imminent’ modifications.”
And the Washington Publish’s Aaron Gregg reported, additionally on Tuesday, that these 1,200 places characterize “about 9.5 % of the pharmacy chain’s 12,500 places worldwide, although it wasn’t instantly clear what share of U.S. shops would shut. Executives had thought-about shuttering way more websites — the corporate in June mentioned 25 % of its retail places have been underperforming, making them candidates for closure. The primary 500 closures will happen over the following 12 months,” he wrote. “Chief government Tim Wentworth mentioned the corporate will give attention to ‘stabilizing’ its retail pharmacy enterprise. ‘This turnaround will take time, however we’re assured it can yield vital monetary and client advantages over the long run,’ Wentworth mentioned. The shop closures — which Walgreens known as an ‘accretive footprint optimization program’—have been introduced as a part of the pharmacy chain’s quarterly earnings report Tuesday.”
And he added that “Walgreens reported a web lack of $8.6 billion for the fiscal 12 months ending Aug. 31 on total gross sales of $147.7 billion. The corporate’s pharmacy gross sales within the fourth quarter elevated 9.6 % year-over-year, however retail gross sales decreased 3.5 %.”
Gregg additionally quoted GlobalData analyst Neil Saunders, who mentioned that the shop closures are “emblematic of an organization that’s in hassle and attempting to course right,” noting that it spent years constructing its enterprise via acquisitions whereas neglecting retail fundamentals like customer support. The corporate is left with plenty of shops that aren’t producing a return on funding, Saunders advised him.
What’s extra, one other 800 shops could possibly be on the chopping block sooner or later, reported Anjalee Khemlani of yahoo!finance, on Tuesday. Khemlani famous that “The quantity had not been beforehand introduced, however Walgreens indicated as much as 2,000 retailer closures coming throughout an earnings name in June. Walgreens inventory jumped greater than 12 % in buying and selling Tuesday on the information — signaling the transfer was no shock, and even welcome, to buyers,” she wrote. “The corporate introduced fiscal fourth quarter earnings consistent with expectations, with a loss per share of $3.48 in comparison with $0.21 in the identical quarter in 2024. Revenues, in the meantime, elevated 6 % 12 months over 12 months to $37.5 billion.”
And, Khemlani wrote, “Mary Langowski, president of US healthcare on the firm, mentioned the strikes made thus far have targeted on near-term shareholder worth. For fiscal 12 months 2025, the corporate will give attention to the expansion of core traces of enterprise, together with the pharmacies and specialty pharmacy providers.”
And a reporter from the Related Press wrote on Tuesday in a non-bylined report revealed in U.S. Information, that “Drugstores that after snapped up prime retail house in cities and cities throughout the nation are in retreat. They’ve been battered by shrinking prescription reimbursement, persistent theft, rising prices and shoppers who’ve strayed to on-line retailers or opponents with higher costs. The enhance they acquired from taking the lead on vaccinations in the course of the COVID-19 pandemic has lengthy since pale.”
That report went on to state that “Walgreens’ announcement Tuesday morning comes as rival CVS Well being wraps up a three-year plan to shut 900 shops and Ceremony Assist emerges from chapter, whittled all the way down to about 1,300 places. As the businesses retract, they increase considerations in lots of communities about entry to well being care and prescriptions. Drugstore leaders and analysts who observe the business say smaller variations of those chains have a future in U.S. retail, however they’re nonetheless attempting to grasp how that may play out.”
