US drugstore chain Walgreens has announced plans to close around 200 locations in the US as part of its transformational cost management programme.
This move follows a review of the real estate footprint in the US that was announced by the company on its earnings call for the fiscal quarter ended 31 May this year.
The company announced the transformational cost management programme on 20 December last year with an aim to generate annual cost savings of more than $1.5bn by financial year 2022.
As part of the programme, the drugstore chain focused on divisional optimisation initiatives, global smart spending, global smart organisation and the transformation of its IT capabilities.
In its SEC filing, Walgreens said: “To date, the company has taken initial actions across all aspects of the transformational cost management programme.
“These actions have initially focused on the company’s Retail Pharmacy USA division, the company’s retail business in the UK and the company’s global functions. Divisional optimisation within each of the company’s segments includes activities, such as optimisation of stores.”
The company expects the programme to result in cumulative pre-tax charges of approximately $1.9bn to $2.4bn, which includes $1.6bn to $2bn as exit and disposal activities.
The retailer also mentioned that the programme generated cumulative pre-tax charges of $265m as of 31 May this year, which includes a $235m as exit and disposal activities.