Walgreens Boots Alliance paid more than £20 million in three months to employees it made redundant since April, the health and beauty giant has announced.

The company said it had made “good progress” on cost-saving measures it announced earlier this year, including plans to axe around 700 non-store based roles in the UK and close a planned 200 US stores. Nine stores had been closed, with up to a further 80 US stores scheduled for closure by the end of August, it said in its financial report for April to June, published last week (July 9).

This cost-saving programme required the company to pay out £102.7m ($160m) over the three months, including £21.8m ($34m) in “severance costs” and £15.4m ($24m) in real estate costs related to store closures, it told C+D yesterday (July 13). 

The strategy was expected to save £97m ($1.5 billion) by 2017, Walgreens Boots Alliance stressed.  

The company saw a 48 per cent increase in sales to £18.5bn ($28.8bn) compared with the same three-month period last year, it said in its financial report. This was “largely due” to the completion of the buyout of Alliance Boots on December 31, it said.

Walgreens Boots Alliance also posted gross profits of £4.8bn ($7.5bn), a 36 per cent increase on last year.

The company’s retail pharmacy international division, which includes Boots, saw sales grow to £2.1bn ($3.3bn) since last year, an increase of 3.2 per cent, it said. The company’s wholesale division, which mainly consists of Alliance Healthcare, saw more modest sales growth of 0.2 per cent, resulting in a total of £3.7bn ($5.7bn).
 

“Another strong quarter”

Former Alliance Boots executive chairman Stefano Pessina was also named CEO of Walgreens Boots Alliance following six months serving in the role on a temporary basis, the company said.

Mr Pessina stressed that “very good cost control” had resulted in “another strong quarter” for Walgreens Boots Alliance.

But he said there was “more work to be done” in future, especially as he expected the company’s growth to slow down in the next quarter due to “seasonality in the business” and the “continuing impact of reimbursement pressures [on] our pharmacies”.

Boots said last month that its UK job cuts would not affect pharmacy employees and would allow the multiple to invest in new technology such as its dispensing hub. 

How do you think Walgreens Boots Alliance's financial results will affect its UK pharmacists?

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