Walgreens to close 1,200 stores, likely including locations in NY, NJ, CT
Walgreens is preparing to close nearly 1,200 locations over the next three years as the drugstore chain works to recover from an estimated $3 billion quarterly loss.
In June, company leaders warned that they were finalizing a turnaround plan for their U.S. stores, which would result in hundreds of closures.
Walgreens earnings
On Tuesday, Walgreens announced that approximately 500 locations would close in the current fiscal year to improve cash flow. This plan also includes the 300 stores previously identified for closure in the last cost-cutting effort.
In a statement, Walgreens CEO Tim Wentworth emphasized that fiscal 2025, which began last month, will be a crucial "rebasing year" for the chain. "This turnaround will take time, but we are confident it will lead to significant financial and consumer benefits in the long run," he stated.
Small owned pharmacies thrive as large chains close
It may feel like there's a chain pharmacy on almost every city block, but the number of them is down by triple digits.
Walgreens has faced years of struggles due to tight reimbursement rates for prescriptions and rising operating costs, along with increased competition from online retailers like Amazon, as well as Walmart and Target.
Meanwhile, rival CVS Health is finishing a three-year plan to close 900 stores, while Rite Aid emerged from bankruptcy earlier this year after reducing its store count to around 1,300 locations.
Why is Walgreens closing?
At the beginning of the year, the company reduced the dividend paid to shareholders to generate more cash for business growth. In June, the drugstore chain further lowered its forecast for fiscal 2024.
The company says its mainly due to largely due to weaker performance in its U.S. retail and pharmacy sectors. The company also faced significant charges related to opioid litigation settlements from previous quarters and an equity investment in China.
Which Walgreens locations are closing?
The drugstore giant didn't say where the store closings would take place but it said all of the stores that were closing are located in the U.S.
Walgreens currently operates 8,500 stores in the U.S. and a few thousand overseas.
The Associated Press contributed to this report.