DEERFIELD, Ill. — As part of its “transformational cost management program” announced last December, Walgreens Boots Alliance plans to close 200 stores in the United States after a review of its store network. The closures amount to less than 3% of its 9,560-plus locations in this country.
In an 8-K filing with the Securities and Exchange Commission, Walgreens estimates that the transformational cost management program will result in cumulative pretax charges of approximately $1.9 billion to $2.4 billion, of which $1.6 billion to $2 billion is expected to be recorded as exit and disposal activities. The company further calculates that about 80% of the total charges will result in cash expenditures, mainly related to lease and other real estate payments, employee severance and technology costs stemming from the company’s IT transformation.
“As previously announced, we are undertaking a transformational cost management program to accelerate the ongoing transformation of our business, enable investments in key areas and to become a more efficient enterprise,” the company stated.
The announcement of the U.S. store closures follows the May declaration that 200 stores in the United Kingdom would be shuttered. In a statement to the media, Walgreens said it anticipates “minimal disruption to customers and patients” and expects to retain the majority of store associates affected by reassigning them to other locations.