PHARMACY FAIL
Walgreens among major drug stores closing in shock moves dominating shut downs in 2025 with 500 locations to shutter
Plus, more on how the chain's recent acquisition will impact the closures
WALGREENS, a major player in the US pharmacy market, is one of several drug store chains with mass closures slated for this year.
The company has set out to shutter 500 locations in 2025 as part of a $1 billion cost-cutting strategy announced by Walgreens Boots Alliance CEO Tim Wentworth last fall.
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The hundreds of closures this year are part of Walgreens' larger plan to close 1,200 underperforming stores over the next few years.
The company operates roughly 8,500 US locations, meaning that by 2027, around one in seven Walgreens will have shuttered.
The Walgreens CEO aims to revive the company's market value, which hit a high in 2015 at $100 billion.
"We recognize where we are is a turnaround," Wentworth said during an earnings call last June.
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"This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term."
The executive also shared that roughly 25% of Walgreens stores were not generating profits or contributing to the company's "long-term strategy."
Walgreens shuttered 70 stores in its first quarter of fiscal 2025 and plans to continue with the shutdowns despite exceeding Wall Street's expectations for its fiscal fourth-quarter and full-year earnings.
In spite of the impending closures, Wentworth has remained optimistic about the company's outlook, sharing that around 6,000 profitable locations would serve as a solid base for future investments.
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"This solid base supports our conviction in a retail pharmacy-led model that is relevant to our consumers, and we intend to invest in these stores over the next several years," said the CEO.
Walgreens has not yet announced a full list of which stores will be closing by the end of the year, the company confirmed in an email to The U.S. Sun.
The company's move follows CVS' completion of its three-year strategy to shut down 900 locations.
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Drug store competitor Rite Aid also downsized to 1,300 stores in the wake of its emergence from bankruptcy.
The decline of these pharmacy chains stems from a slew of factors, including decreasing prescription reimbursement, high rates of theft, and increased costs.
Changing consumer preferences have also played a role, as shoppers turn to online retailers and rivals offering more competitive pricing, such as Amazon and Walmart.
Additionally, the temporary financial boost to drug stores stemming from their important role in Covid-era vaccinations has faded.
DONE DEAL
Walgreens was bought out by private equity firm Sycamore Partners for $10 billion, the companies confirmed earlier this month.
Sycamore Partners has been known to purchase struggling retailers for profit such as Staples, Talbots, and Nine West.
The private equity firm's previous turnaround strategy has involved selling valuable assets of the companies and reducing costs via store closures and other measures.
The shut downs that Walgreens planned prior to entering into the definitive agreement with the firm are expected to continue as planned.
"I'd imagine their new owners will evaluate heavily both internal data and external data around the communities each of the soon-to-be-closed stores sit within," retail expert Nicole Leinbach Hoffman told Newsweek.
"If I had to guess, they'd still close them, however, to open up dollars to nurture the remaining stores with a refreshed strategy."
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The current retail landscape has many chains struggling, with an estimated 15,000 closures in 2025.
For example, a popular sneaker chain has filed for bankruptcy, becoming the latest casualty of an ongoing retail bloodbath.