Boots ‘is set to close more than 200 stores in next two years‘ in devastating new blow to High Street
Boots could become the latest casualty of Britain‘s crisis-hit High Street with 200 stores under review for possible closure, it has been revealed today.
The chain‘s American parent, Walgreens Boots Alliance (WBA), last month warned it had suffered its ‘most difficult quarter‘ since its formation and would need to take ‘decisive steps to reduce costs in the UK‘.
It is now examining 200 stores which could be set to close over the next two years, nearly one in 10 of the 2,500 outlets across the country which employ 60,000 staff.
While the news could come as a shot in the arm to independent and online retailers, it comes as blow to tens of thousands of workers.
The UK High Street suffered one of its worst years in 2018 with several retailers shutting their doors and plaguing homes across the country with job losses.
And this year looks to be following a similar pattern, with the fashion brand L.K Bennett and Jamie‘s Italian among those filing for administration.
The American drug store chain Walgreens acquired a 45% stake in Alliance Boots in 2012 and in 2014, Walgreens Boots Alliance was created.
WBA has now placed more than 200 outlets under review, according to . Sources told Sky that while no decisions had yet been made, a ‘significant number‘ of stores were likely to be shut.
Boots employs about 60,000 staff and has 2,500 UK shops. It said sales fell 1.3 per cent in the three months to February.
At the same time, Walgreens – itself a large pharmacy chain in the US – 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 £1.1billion by 2022 – up from its previous target of around £750million.
Walgreens Boots Alliance was formed from a major merger five years ago between Walgreens and Boots Alliance. Boots itself was founded in 1849.
In April this year, Walgreens Boots Alliance said it had started taking ‘decisive steps‘ in the UK to cut costs, including reviewing its near-2,500 Boots retail stores.
The group said it was looking at poor performing shops as well ‘opportunities for consolidation‘.
It follows the group‘s announcement in February that 350 jobs are at risk in its Nottingham head office amid plans to trim HQ staff costs by 20%.
Which restaurants are closing amid the high street bloodbath?
Jamie Oliver‘s chains last week became the latest casualties among the bloodbath sweeping the British high street, with 22 of 25 restaurants closing with immediate effect.
Dining chains Giraffe and Ed‘s Easy Diner revealed in March that their owner plans to close a third of the brand‘s sites.
Boparan Restaurant Group (BRG) announced that a total of 27 out of its 87 restaurants would close. It bought Giraffe from Tesco in 2016 and combined it with Ed‘s Easy Diner after acquiring the chain that same year.
Last year, several casual dining brands closed sites amid rising costs and tougher competition.
Prezzo, Byron, Carluccio‘s, Gaucho and Gourmet Burger Kitchen all shut branches.
In November, creditors of Gourmet Burger Kitchen approved a plan to close 17 of the premium burger chain‘s restaurants, putting around 250 jobs at risk.
Also in 2018, Prezzo announced that 94 of its 300 outlets will close.
WBA reported a 2.3% drop in like-for-like UK retail sales in its second quarter to February 28, while comparable pharmacy sales dropped 1.5%.
The group is now expecting underlying earnings per share growth to be roughly flat in the current financial year, a hefty downgrade on its previous guidance of 7% to 12% growth.
Global underlying net earnings slumped 14.3% to £1919 million in the second quarter. But sales rose 4.6%, or 6.7% with foreign exchange movements stripped out.
The international division including the UK saw second quarter earnings drop 8.9%, or 1.2% lower on a constant currency basis.
Mr Pessina admitted the group did not take action swiftly enough to offset challenging conditions.
But he outlined plans to turn around it fortunes, including ramping up global cost cutting targets by around another £383 million to more than £1.1 billion by 2022.
He also plans to make a number of senior hires to speed up efforts to boost its digital capability and transformation.
Mr Pessina said: ‘Our response was not rapid enough given market conditions, resulting in a disappointing quarter that did not meet our expectations.
‘We are going to be more aggressive in our response to these rapidly shifting trends. We are focusing on our operational strengths and addressing weaknesses.‘
Walgreens Boots Alliance was formed in 2014 after Walgreens bought the 55% stake in UK and Switzerland-based Alliance Boots that it did not already own.
A Boots spokesman said: ‘We currently do not have a major programme envisaged, but as you‘d expect we always review underperforming stores and seek out opportunities for consolidation.
‘As is natural with a business of our size, we have stores opening, closing and relocating on a regular basis, but we have had around 2,500 stores open for several years now. In fact we‘re investing in our stores – last year, we completed a huge merchandising project to update our self-selection cosmetics areas in 2,200 of our stores.
‘We have recently announced the planned opening of a new flagship store in Covent Garden, London and the reinvention of our beauty business in 24 stores across the UK. We are being realistic about the future and that we will need to be agile to adapt to the changing landscape.‘
Bloodbath on the High Street: How shops went from bustling to bust
2018 saw one of the worst years for the UK High Street with retailers shutting their doors and plaguing homes across the country with many job losses.
Crisis hit brands such as House of Fraser and Marks & Spencer fought to keep stores open while other retailers such as New Look pushed for a solution to stop store closures and job losses.
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In 2018 nearly 85,000 retail jobs were lost in the UK as businesses continued to go bust as 1,000 retail business went into administration between January and September.
As well as this the number of retail outlets left empty was up by 4,400 in 2018 according to data from the Local Data Company.
High Street giant Gap has also announced it will close 230 stores worldwide as its US parent company launches a massive restructuring programme.
The pressure on High Street retailers has hit an all-time high as they continue to try and keep up with the ever growing popularity of online shopping.
Online retailers are able to keep prices low as they don‘t face the massive rental costs of physical stores or the staff rates.
While retailers battle the rise in online shopping they are also being forced to battle Brexit, as many supply chain routes and whether or not they will be available in a no-deal scenario have put added cost worries onto retailers as many consider stock piling their items or not importing them at all.
Here are some of the big name retailers which have lost out as they face fierce competition from the rise of online shopping
The carpet retailer is closing 92 stores across the UK. These closures represent nearly a quarter of all UK Carpetright stores.
Toys R‘ Us
The UK‘s largest toy shop went into administration in February 2018, leading to an estimated 2,000 redundancies.
House of Fraser
The department store chain was on the verge of heading into administration but was rescued at the eleventh hour by Sports Direct owner Mike Ashley.
The electronics giant has gone bust, closing shops across the country and putting thousands of jobs at risk.
The baby and toddler chain is closing 60 shops across the UK putting up to 900 jobs at risk.
Poundworld announced it was going into administration on June 11 after talks with potential buyer R Capital broke down, putting 5,100 jobs at risk.
The DIY chain set to close 42 DIY outlets shut, putting around 1,500 jobs at risk.
Marks & Spencer
The retailer announced in May it plans to close 100 stores by 2022, putting hundreds of jobs at risk.
In August stores in Northampton, Falkirk, Kettering, Newmarket, New Mersey Speke, Stockton and Walsall all ceased trading.
Orla Kiely, the Irish fashion retailer collapsed in September and closed all its stores after a slump in profits.
In December HMV entered into administration with its flagship London Oxford Street having closed earlier this year.
Fashion brand L.K Bennett announced it was filing for administration on March 1, 2019. Linda Bennett sent employees an email early in the morning to inform them of the news before it hit news outlets.
From humble herbalist to World War One aspirin pioneer – how Boots the Chemist became High Street giant
1849: John Boot opened the first herbalist store in Nottingham offering an affordable alternative to traditional medicines. The Thomsonian system of healthcare, first developed in the US, appealed to the devoutly religious John, as it offered a practical approach to enable the poorest to help themselves
1870: John‘s widow, Mary Boot, and son, Jesse began trading as M & J Boot, Herbalists after Jesse left school at the age of 13. The sale of herbs was a big feature and included roots, plants, and flowers collected locally, dried on the parlour walls at the back of the shop and then powdered
1877: Jesse took sole control of the business and launched the campaign ‘health for a shilling‘ offering traditional medicines at greatly reduced prices
1884: Jesse Boot appointed his first qualified pharmacist, Edwin Waring. His dispensing services were offered at half the price charged by the other chemists in Nottingham
1885: Early manufacturing took place in a small cottage close to the store in Nottingham, before expanding to a factory. Within a few years Boots had taken over the entire factory and acquired further properties nearby
1892: A flagship department style store was opened in Pelham Street, Nottingham with products available from the dispensary, perfumery and stationery on the ground floor to pictures, glass and fancy goods upstairs. The store ‘took the public fancy amazingly‘ and became the model for future Boots stores
1915: During WW1 Britain lost its supply of chemicals from Germany. Jesse brought together a team of experts to begin the research and manufacture of key synthetic chemicals such as aspirin. Boots claimed that their aspirin was the ‘purest on the market‘. The company was soon supplying the British Government with medicines for field hospitals
1935: The original ‘Number Seven‘ range was the company‘s answer to providing a prestigious but affordable beauty range
1939: The launch of Soltan addressed customers‘ desire for a non-greasy lotion. The summer of 1939 helped to make the brand an instant success
1951: Boots became the first UK chemist store to introduce self-service stores. Boots opened its first self service store at Burnt Oak, Edgware in London
1983: Boots trialled its first optical in-store practice in Nottingham and followed it with six further practices in the following year
1985: Boots received the Queen‘s Award for Technological Achievement for the discovery and development of ibuprofen
1987: Boots Opticians was formed. The first free standing Boots Opticians practice opened in September 1987, in Durham
2009: Merger of Boots Opticians and Dollond & Aitchison to form the second largest optical chain in the UK. Launch of BootsWebMD offering customers a health and wellness information portal. Launch of No7 Protect & Perfect Intense Beauty Serum
2010: Boots brands were sold directly to third party retailers in the US and other countries. Boots Pharmaceuticals launched
2012: American drug store chain Walgreens acquired a 45% stake in Alliance Boots
2014: Walgreens Boots Alliance was created through the combination of Walgreens and Alliance Boots