By Tom Murphy
The Associated Press
Walgreens will shutter roughly 200 U.S. stores as part of an expanded cost reduction push, but which stores will close has not been decided yet.
“We are still finalizing the list of stores, so we don’t have specific locations to announce at this time,” said Phil Caruso, Walgreens spokesman, in an email.
Walgreens has two stores on the North Olympic Peninsula: 932 E. Front St. in Port Angeles and at 490 W. Washington St. in Sequim.
“No hard timeline has been set,” he added. “The closing will occur over a period of time.”
Caruso said that the number of closures is approximate and that the company will not focus on any one geographic area.
Walgreens, the nation’s largest drugstore chain, has no plans to shrink in the wake of its combination with European health and beauty retailer Alliance Boots.
The Deerfield, Ill., company expects to open roughly the same number of stores and will consider more mergers and acquisitions, even as it continues to digest a nearly $16 billion deal that finalized its combination with Alliance Boots, which runs Britain’s largest pharmacy chain.
Walgreen Co. President Alex Gourlay told analysts that it was considering closures in locations where the population seemed to be moving away.
“This really is just getting the right stores in the right places,” he said.
The store closings that Walgreens announced Thursday amount to only about 2 percent of the 8,232 drugstores the company runs in the United States, Puerto Rico and the U.S. Virgin Islands.
Nevertheless, the closings are the latest example of a strategy shift for a company that was opening about
500 stores a year a decade ago.
Walgreens once estimated that it was opening a new store every 17 hours on average.
Major drugstore chains once focused mainly on growing by adding locations.
Now, they’re trying to squeeze more revenue out of each store by expanding and improving the services they offer and making them more competitive with the grocery chains and big retailers like Wal-Mart that have muscled into the prescription business.
Walgreens also announced the closing of 76 stores last year.
The latest round comes as the company expands on a $1 billion, three-year cost reduction plan it announced in August.
Late last year, Walgreens completed its purchase of the remaining stake of Alliance Boots that it didn’t already own.
The company was renamed Walgreens Boots Alliance Inc.
Walgreens initially bought a 45 percent stake in Alliance Boots in 2012 for about $6.7 billion in cash and stock.
Company executives told analysts Thursday that the company may not be done growing.
They said more deals are among their top priorities for free cash, along with share buybacks, in terms of boosting shareholder value in the long run.
That could mean another acquisition or a joint venture that it works out while Walgreens and Alliance Boots complete their integration.
“If we . . . see opportunities, we will be ready,” Stefano Pessina, executive vice chairman and acting, said during a conference call.
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The Peninsula Daily News contributed to this report.
