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Boots plots hundreds of store closures in new retail blow | Business News

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The American owner of Boots The Chemist is exploring the closure of hundreds of shops in the latest blow to Britain’s crisis-hit high streets.

Sky News has learnt that Walgreens Boots Alliance (WBA) has placed more than 200 outlets under review for possible closure during the next two years.

Sources close to the company insisted on Tuesday that decisions had yet to be made about the stores under scrutiny, but acknowledged that a significant number were likely to be shut.

WBA said in April that it was undertaking a review of its Boots The Chemist estate “focusing on low-performing stores and opportunities for consolidation”, although it declined to specify then the number that it was considering shutting.

If it pursued the closure of the 200-plus shops being examined, it would equate to just under 10% of the chain’s standalone UK health and beauty outlets.

An insider said that some of the affected sites would close at the expiry of their leases, while others would be part of a consolidation in towns which currently have two separate Boots stores.

Where possible, staff would be redeployed to an area’s existing, or new, store, they added.

Employing roughly 56,000 people, Boots is one of the largest retailers in Britain by store numbers and also trades from about 1100 opticians and hearing-care shops which use its brand.

The company joins most other major high street players in examining measures to reorient its bricks-and-mortar presence as consumers’ shift to digital channels accelerates.

Some of the biggest names in British retailing, including Debenhams, Homebase, Mothercare and New Look, have turned to formal restructuring processes to reduce their footprints and cut rents across their estates.

Sir Philip Green, whose family owns the Dorothy Perkins-to-Top Shop empire, Arcadia Group, last week set out plans for a Company Voluntary Arrangement (CVA) that will, if approved by creditors, lead to dozens of store closures.

WBA would not be eligible to use a CVA because companies need to be able to demonstrate that the alternative to their implementation is insolvency.

If it opts to shut all of the stores it is reviewing, it would be among the largest closure programmes seen to date during this wave of the high street’s protracted crisis, which retailers say has been exacerbated by government policy on business rates..

Boots has been part of the New York-listed WBA since 2012, following a stint under the ownership of KKR, the private equity firm.

The UK health and beauty retailer saw profits fall by more than 18% last year, and has warned that it would be included in a broader push to cut costs by £1.2bn by the 2022 financial year.

It has also announced plans to cut hundreds of jobs at its head office in Nottingham.

In a statement issued alongside its second-quarter results last month, a Boots spokesperson said: “We currently do not have a major [store closure] 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.”

The spokesperson highlighted “a huge merchandising project to update our self-selection cosmetics areas” and the opening of a flagship store in London’s Covent Garden on the site of a former Marks & Spencer outlet.

“We are being realistic about the future and that we will need to be agile to adapt to the changing landscape,” April’s statement added.

Boots declined to comment on the number of stores it was now examining for potential closure.

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