A massive retailer with 8,700 stores is now closing locations nationwide after reviewing approximately 25% of their stores.
Walgreens plans to close a “significant portion” of its roughly 8,700 stores in the U.S., CEO Tim Wentworth told investors on a Thursday morning earnings call.
The company didn’t share a specific figure, but said it is reviewing one-quarter of its stores that are underperforming financially.
Walgreens has already closed hundreds of stores over the past few years.
The company is pulling back its focus on healthcare services after the strategic shift failed to bolster the struggling retailer’s financial health.
Walgreens also plans to reduce its stake in value-based medical chain VillageMD, and will no longer be the company’s majority owner, Wentworth said after announcing third quarter earnings below analyst expectations.
The company’s plan to turn around its dragging finances is the result of a strategic review Wentworth began in January, after Walgreens brought in the ex-Cigna executive to replace Rosalind Brewer as chief executive, reports Retail Dive.
During her tenure, Brewer spearheaded Walgreens’ strategic shift away from its legacy pharmacy model and toward healthcare delivery, in a bid to lessen significant pressures in the retail pharmacy space, including antiquated reimbursement models and competition from vendors like Amazon.
However, despite heavy investments in that U.S. Healthcare division — especially on growing VillageMD — the business has yet to turn a profit on a nonadjusted basis, spurring a crisis of faith at the company about its strategic direction.
“We don’t have plans to continue to invest in brick-and-mortar owned primary care practices,” Mary Langowski, the president of U.S. Healthcare, told investors on the Thursday morning call.
Instead, Walgreens is again recentering its strategy around its core pharmacy business, according to Wentworth.
Walgreens plans to launch a retail pharmacy action plan to improve customer experience in its stores, better align its pharmacy and healthcare businesses, and focus on reliable products in areas like women’s health, Wentworth said.
“We’re at a point where the current pharmacy model is not sustainable,” Wentworth said.
Walgreens is reviewing about 25% of its stores, and plans to close a significant number over the next three years.
A store’s profitability and level of shrink will factor into whether or not it remains open, as will consumer behavior and competition in its market, said Tracey Brown, Walgreens’ chief customer officer.
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Also Read: An Unexpected Retailer Is Now Closing All Stores in Illinois
Other Economy News Today
An unexpected restaurant now abruptly closes 7 locations in one state after revealing plans to shutter a total of 36.
TGI Fridays is closing a total of seven restaurants in one state as part of the company’s ongoing growth strategy.
This comes after the chain abruptly closed 36 locations across 12 states in at the beginning of the year, per The-Sun.
The restaurant chain will pull the plug on seven locations across the state of New Jersey in the coming weeks.
Today, Fridays will welcome in famished diners at its location in Brick for the final time.
“As we continue along our path of transformation to revitalize the Fridays brand and implement a long-term growth strategy, we see a bright future for TGI Fridays,” said Weldon Spangler, CEO of TGI Fridays earlier this week.
“We are at the helm of a pivotal moment that will allow us to explore boundless advancement, expansion, and innovation to keep delivering ‘That Fridays Feeling’ that our fans know and love.”
Before the closures, TGI Fridays had about 270 US locations, according to the company’s website.
“As part of the store closures, TGI Fridays is offering more than 1,000 transfer opportunities, which represents over 80% of total impacted employees,” the company previously said in a statement.
“Our top priority has always been delivering a superior experience for each and every TGI Fridays guest, and we’ve identified opportunities to optimize and streamline our operations to ensure we are best positioned to meet – and exceed – on that brand promise,” said Ray Risley, US president and chief operating officer, in the release.
Eight other locations were sold to former CEO Ray Blanchette, a longtime stakeholder who will acquire the previously corporate-owned restaurants.
The sale comes as major changes have been made to the brand’s leadership, including the news of Weldon Spangler being made CEO.
“As we continue along our path of transformation to revitalize the Fridays brand and implement a long-term growth strategy, we see a bright future for TGI Fridays,” said Spangler in a statement.
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