Drugstore chain Walgreens announced that it will aim to close at least 200 U.S. stores in an effort to boost its cost-cutting initiative by $500 million.
The largest U.S. drugstore plans to reduce costs by $1.5 billion by the end of fiscal 2017, according to USA Today.
"After a rigorous analysis, the company has identified additional opportunities for cost savings, primarily in its Retail Pharmacy USA division," the company said Thursday. "Significant areas of focus include plans to close approximately 200 USA stores; reorganize corporate and field operations; drive operating efficiencies; and streamline information technology and other functions."
There is no "hard timeline" for the closure of the stores, and Walgreens' spokesman Philip Caruso said that it is not focusing on any specific geographic area. The company has not determined which stores will be closed just yet.
Walgreens has 8,232 drugstores in the U.S., Puerto Rico and the Virgin Islands, and the closings only amount to 2 percent of that number.
The drugstore chain is clearly shifting business patterns and methods, as nearly a year ago it was estimated that Walgreens opened a new store every 17 hours on average, thestate.com reported.
Walgreens President Alex Gourlay told analysts that closures will most likely occur in areas with dwindling populations.
"This really is just getting the right stores in the right places," he said.
Walgreens merged with European drug retailer Alliance Boots last year, and has since purchased the remaining stake of Alliance Boots that it didn't already own.
Walgreens is now known as Walgreens Boots Alliance Inc., and the two companies put together have upwards of 12,800 stores in 11 countries.
Despite the planned closings, Walgreens said adjusted second-quarter net earnings increased 33.2 percent to $1.2 billion, and second-quarter sales increased 35.5 percent to $26.6 billion, USA Today reported. Not too shabby.
