Boots warns of job cuts and store closures
High Street chemist Boots has warned it could close shops and cut jobs after its US parent company issued a profit warning.
Walgreens Boots Alliance said it had suffered its ‘most difficult quarter’ since it was launched.
The American company also warned it will need to take ‘decisive steps to reduce costs in the UK.’
This will include a review of the firm’s chain of shops. The company previously said 350 jobs were at risk at its Nottingham headquarters.
Boots employs 60,000 staff and has 2,500 UK shops. It said sales fell 1.3 per cent in the three months to February.
It is the latest in a string of big names to be hit by the downturn in spending. House of Fraser, Debenhams and many others have struggled to cope with changing consumer habits.
Walgreens said profits had been hit by tough competition and falling prices in the drugs market.
Stefano Pessina, the company’s chief executive, said: “While we are not the only company that has been impacted by the marked change in the environment, that’s not an excuse.”
Overall Walgreens said it now wanted to save £1.1bn by 2022 – up from its previous target of around £750m.
Global underlying net earnings slumped 14.3% to £1,919m in the second quarter.
The international division including the UK saw second quarter earnings drop 8.9%, or 1.2% lower on a constant currency basis.
The US-based business has said it had started taking “decisive steps” in the UK to cut costs, including reviewing its 2,500 Boots retail stores.
The group revealed it is looking at poor performing shops as well “opportunities for consolidation”.
Daniel Adams – Usdaw National Officer said: “This is clearly very worrying news for the staff in all Boots stores and the Union will be doing all it can to support members during this difficult time.
“We would urge the company to engage with Usdaw as the trade union for Boots staff to ensure that all avenues to minimise job losses are explored during this critical time.”
Walgreens Boots Alliance was formed from a major merger five years ago between Walgreens and Boots Alliance.
Boots is one of the oldest names on the UK high street and was founded in 1849.
