US owner of Boots pharmacy chain warns it could close stores after shock profit warning

The US parent company of pharmacy chain Boots has warned that it could close stores in the UK to reduce costs as it issued a shock profit warning.

Walgreens Boots Alliance Inc. (NASDAQ:WBA) said it would review its global store portfolio, including 2,485 Boots stores in the UK, following the “most difficult quarter” in the group’s history.

The move puts 56,000 Boots jobs at risk.

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The group cut its full-year guidance to flat profits from its previous guidance of 7% to 12% growth after second quarter earnings dropped 14.3%.

UK like-for-like sales dropped 2.3%.

However, Boots in the UK said there were no plans for major reductions in stores as it had still kept its market share during the period.

“We currently do not have a major programme envisaged, but as you’d expect, we always review underperforming stores and seek out opportunities for consolidation,” it said.

The weaker sales at Boots reflect widespread struggles on the UK high street due to weaker consumer confidence and online competition.

A difficult retail market led to the collapse of Toys R Us, Poundworld and Maplin last year.

Other retailers, such as New Look, Mothercare and Carpetright, have agreed restructuring deals with their landlords to allow them to reduce rents and close stores.

Story by ProactiveInvestors