Walgreens’ Debt Reduction Efforts Ramp Up
Walgreens Boots Alliance has continued to downsize its stake in drug distributor Cencora, selling an additional chunk of shares worth .1 billion. This marks the third sale of Cencora shares by Walgreens this year, following transactions in November and May that earned the company 4 million and 0 million, respectively.
Walgreens has been actively selling off its assets to cut debt and allocate resources for strategic initiatives. This move is part of a broader plan to streamline the business portfolio and enhance cash flow management. These efforts began under the leadership of former CEO Roz Brewer and have continued under the new CEO Tim Wentworth, who assumed the role in November 2023. Wentworth’s vision includes investing in primary care clinics integrated with pharmacies to broadening access to doctor-staffed clinics nationwide.
Fleet Optimisation Announced
Walgreens has announced significant store closures across the United States to address underperforming locations. The move is part of a multiyear optimization program aimed at resetting the company’s business. The specific number of closures has not been disclosed, but they are expected to take place over the next three years, targeting unprofitable or redundant stores. Most affected employees will be offered positions elsewhere within the company.
Walgreens has also been grappling with challenges in its retail sector. The company faced eroding pharmacy margins due to recent marketplace dynamics and has struggled to retain customers amid the rising cost of living. To adapt to these challenges, Walgreens slashed prices on over 1,000 items, a move other rivals have also taken. The company has also diversified its product offerings, focusing more on its house brands and preferred partners, especially in health and wellness categories.
