Deerfield-based Walgreens plans to close 1,200 of its stores over the next three years, as it grapples with continued financial losses, the company announced Tuesday.
About 500 of those stores will close in fiscal year 2025. The company now has about 8,000 U.S. stores, meaning it plans to close about 15% of its locations.
Walgreens CEO Tim Wentworth said in an earnings call Tuesday morning that about 6,000 of those current 8,000 stores are profitable.
“While the decision to close a store is never an easy one, we feel confident in our ability to serve our customers,” Wentworth said on the call. He said Walgreens plans to “redeploy” most of the workers in those stores and invest in remaining stores.
Many of the stores slated to close next year will shutter in the second half of the year, said Manmohan Mahajan, executive vice president and global chief financial officer, during the call. He said Walgreens plans to focus on closing stores where it owns the locations or where leases are set to expire in the next few years.
Wentworth had warned earlier this year that Walgreens planned to close “a significant portion” of its underperforming stores over the next three years.
In recent years, Walgreens has struggled with losses as it worked to become more of a health care destination, and as it’s faced competition from CVS Health, Walmart and Amazon. Wentworth said Tuesday the company plans to reorient to focus more on its historic work as a retail pharmacy-led organization.
Between June 1 and the end of August, the company had an operating loss of $978 million compared with $450 million during the same quarter last year.
The company has conducted several rounds of layoffs, eliminating more than 1,000 jobs over the last few years, including many in Illinois. It’s also been working to cut costs, and has already exceeded its goal of cutting $1 billion in costs this year, following years of similar measures.
Walgreens had also invested billions of dollars in Chicago-based VillageMD, which provides primary care. At one point, Walgreens had planned to attach Village Medical clinics to 1,000 of its stores by 2027. But Wentworth said in March that Walgreens had recorded a $5.8 billion impairment charge related to VillageMD, and that VillageMD would be closing 160 clinics. Walgreens said in August, in a filing with the Securities and Exchange Commission, that it was considering selling all or part of its VillageMD business.
Originally Published:
Leave a Reply