The largest drug store chain in the U.S. plans to shutter 200 of its more than 8,200 U.S. stores. Forbes magazine reports that Walgreens, under a new management team headed by Italian billionaire Stefano Pessina, is making the move as part of a global expansion plan.
Pessina, the company’s interim CEO after the retirement of Greg Wasson, detailed the plans this morning in a conference call with analysts. Said Pessina: “We believe we will come out of this stronger and better.”
The company’s international growth plan includes cutting $1.5 billion in costs, the report notes. Walgreens recently acquired European drug store company Alliance Boots and now operates under the banner Walgreens Boots Alliance.
“Pessina said the U.S. retail pharmacy operation has been underperforming in certain areas and will be the primary focus of an additional $500 million in cost-cutting on top of the $1 billion ‘cost-reduction’ initiative previously announced,” Forbes reports. “The three-year cost-cutting plan will be completed by the end of Walgreens fiscal 2017.”
Even after the closures, Walgreens will reportedly still have more U.S. stores than its rival CVS.