Walgreens to Close 200 Stores This Fall in Move to Dramatically Cut Costs

Walgreens plans to close 200 U.S. stores as part of a wide-ranging cost management program it undertook late last year.The announcement of the store closings, contained in a Walgreens Boots Alliance regulatory filing Tuesday, follows a disclosure by the drugstore chain in May that it would close 200 stores in the United Kingdom.No specific store closure locations were detailed in the filing. Company spokesman Phil Caruso said Walgreens would not make a full list of affected stores available, but the closings will begin in the fall.The company operates more than 18,500 stores in 11 countries."Given that these closures will represent less than 3% of our stores overall, and given that we have multiple locations in many markets, we anticipate minimal disruption to customers and patients," Caruso said in an email. "We also anticipate being able to retain the majority of the impacted store team members in other nearby locations."In December, Deerfield-based Walgreens said it would take a number of actions to dramatically cut its costs by 2022. The "transformational cost management program," as the company is calling it, will mean a pre-tax charge against earnings of about $1.9 billion to $2.4 billion, according to the regulatory filing. Of that sum, employee severance and business transition costs are expected to range from $600 million to $700 million.Walgreens has faced numerous challenges, and in April revised its annual cost-cutting goal to $1.5 billion, from $1 billion. The company acquired the 2,000-store Rite Aid chain in 2017 for more than $4 billion, and earlier this year announced it would close 750 of those locations, up from 600. It has cut bonuses for store managers and others, said it would eliminate health insurance for a number of eligible retirees after this year and revised its earnings outlook.In its fiscal third quarter, Walgreens earnings fell 24% year-over-year and said it expected its full-year earnings to be roughly flat with a year ago.Chicago Tribune (TNS)  Continue reading...