Walgreens to shutter 76 unprofitable locations

Despite an announcement by rival CVS to stop selling tobacco products, Walgreens said it will continue to sell these products.
By Ananth Baliga  |  Updated March 26, 2014 at 4:30 PM
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DEERFIELD , Ill., March 26 (UPI) -- Walgreen, the nation's largest drugstore chain, has decided to shutter 76 unprofitable stores by August but hasn't specified the locations.

The Deerfield, Ill.-based company announced Tuesday that the store closings were part of a plan to save between $40 million and $50 million. While no specific locations were targeted, it was specified that closings would be spread across the country. Walgreens said it would confirm the closings after notifying their employes.

“We won’t be confirming those locations until we’ve notified employees at the stores first,” said spokesman Michael Polzin.

In a conference call with analysts, Walgreen CEO Greg Wasson said that most of the locations will be near existing Walgreen stores and that employees from these store will be largely reassigned.

"While we seize the opportunity for store growth as the population ages and consumers look to community pharmacy for their healthcare needs, we also continue to focus on optimizing our assets and organization to position Walgreens for our future as a global company," Wasson said.

Even after these closures, the drugstore chain is looking at an overall increase in store count for 2014, anywhere between 55 and 75 locations. Currently, Walgreens operates 8,210 drugstores nationwide, 138 more than last year.

Walgreens' second quarter net income fell to $754 million, down from $756 million in the same quarter a year ago. A slower cold and flu season and severe weather dragged down profits across the U.S. Profits were also brought down by the introduction of fewer generic drugs, which are generally more profitable for pharmacies.

Wasson also said that the company does not have any plans to stop the sales of tobacco products, following an announcement by rival CVS to halt such sales by Oct 1.

[Chicago Tribune] [LATimes]

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