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Boots owner spends £54m on redundancy-related costs

Walgreens Boots Alliance declined to confirm how much of the money was paid to former Boots UK employees

Walgreens Boots Alliance has spent £54 million ($83m) on redundancies and related costs in three months, the company has revealed.

The global health and beauty giant has spent £353.2m ($542m) on its cost-saving programme since it announced the plan in August 2014, it said. The programme is intended to save £975m ($1.5bn) by 2017 through measures including axing around 700 non-store based roles in the UK and closing 200 US stores.

The company has now achieved "more than half of the programme's expected savings", with 84 US stores already closed, Walgreens Boots Alliance revealed in its latest financial report on Wednesday (October 28). 

The company told C+D it could not confirm how much of the £54m, spent on “severance and other business transition and exit costs” between June and August, relates to Boots UK redundancies. The company spent £22m specifcally on redundancies between March and May, it revealed in July. 

Pharmacy and wholesale divisions report increases

The company’s retail pharmacy international division, which includes Boots, reported sales of £2.3bn ($3.5bn) between June and August, a 4.3% rise on the same period last year, it said this week. Its wholesale division, which mainly consists of Alliance Healthcare, reported sales of £3.8bn ($5.8bn), 5% higher than the same period last year, it said.

Walgreens Boots Alliance reported overall sales of £18.6bn ($28.5bn) for the three-month period, it added. The company also announced its acquisition of fellow US pharmacy giant Rite Aid in a £11.2bn ($17.2bn) deal this week.

Walgreens Boots Alliance CEO Stefano Pessina said the company is “pleased with our progress” in its first fiscal year since its buyout of Alliance Boots in December 2014. But he stressed there is still “much work to some challenging markets”.

Boots told C+D in June that the 700 UK job losses would take place over the next two to three years and could affect staff involved in Boots’ HR, finance, marketing, trading and operations teams across the UK and Ireland, as well employees at its Nottingham head office.

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