Analyst: Walgreens Expects Private Boost From Boots

September 28, 2012

In a report released Friday on Walgreens' fiscal fourth-quarter earnings, Planet Retail Research Director - US Sandy Skrovan said the country's largest drug chain believes its best asset from its recent acquisition of England's Alliance Boots is the company's private brand experience.

"On the retail operations side, Planet Retail believes the rationale behind the deal is perhaps most notable in terms of the potential to share best practices," Skrovan said. "Walgreens has been looking to expand its premium beauty offering in urban markets recently, and Boots’ experience in selling prestige brands could be invaluable here."

Skrovan said she expected improvements in 2013 at Walgreens after the retailer suffered a rough 2012, highlighted by the loss, then return, of its deal with Express Scripts.

"Planet Retail expects progress from Walgreens on several fronts as the retailer looks to broaden its geographic footprint both domestically and abroad; deepen shopper relationships; revive a stagnant pharmacy business, and reap synergies related to the Alliance Boots deal," she said,

She said Planet Retail projected the combination of Walgreens and Alliance Boots could produce 13,500 stores worldwide -- up from 12,000 today -- by 2017 as the company climbed near the top 10 worldwide retail list, by sales.

"Walgreens is repositioning to become a provider of 'retail health and daily living' and become the first choice for consumers in attending to their daily health care needs," she said. "Walgreens is well on its way in transforming to a truly global health and wellness provider."

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