200 store closings in Walgreen plan

Drugstore chain trying to cut costs; shutdowns start in fall

Walgreen Co. plans to close 200 U.S. stores as part of a wide-ranging cost-management program it undertook late last year.

The announcement of the store closings, contained in a Walgreens Boots Alliance regulatory filing Tuesday, follows a disclosure by the drugstore chain in May that it would close 200 stores in the United Kingdom.

No specific store closure locations were detailed in the filing. Company spokesman Phil Caruso said Walgreen would not make a full list of affected stores available, but the closings will begin in the fall.

There are 80 stores in Arkansas, according to the Walgreen website. The company operates more than 18,500 stores in 11 countries.

“Given that these closures will represent less than 3% of our stores overall, and given that we have multiple locations in many markets, we anticipate minimal disruption to customers and patients,” Caruso said in an email. “We also anticipate being able to retain the majority of the impacted store team members in other nearby locations.”

In December, Walgreen, based in Deerfield, Ill., said it would take a number of actions to dramatically cut its costs by 2022. The “transformational cost management program,” as the company is calling it, will mean a pretax charge against earnings of about $1.9 billion to $2.4 billion, according to the regulatory filing. Of that sum, employee severance and business transition costs are

expected to range from $600 million to $700 million.

Walgreen has faced numerous challenges, and in April

revised its annual cost-cutting goal to $1.5 billion, from $1 billion. The company acquired the 2,000-store Rite Aid chain in 2017 for more than $4 billion, and earlier this year announced that it would close 750 of those locations, up

from 600. It has cut bonuses for store managers and others, said it would eliminate health insurance for a number of eligible retirees after this year and revised its earnings outlook.

In its fiscal third quarter,

Walgreen’s earnings fell 24% year-over-year and said it expected its full-year earnings to be roughly flat with a year ago.

Walgreen shares rose 1% to close at $52.48 in Wednesday trading.

Bloomberg News Pharmacy chain Walgreens, which says it has more than 18,000 stores worldwide, 80 of them in Arkansas, plans to close 200 stores in the U.S. later this year.