Walgreens is ready to shut 5 places throughout Los Angeles and Orange counties within the coming weeks — a transfer that might end in at the very least 93 job losses because the struggling retailer strikes forward with a downsizing that can see round 1,200 closures nationwide.
The pharmacy chain will shutter shops in Whittier, downtown Los Angeles, Orange, Placentia and Stanton, based on a discover submitted to California’s Employment Improvement Division.
The shop closures will result in layoffs for a spread of workers, together with pharmacists, pharmacy technicians, cashiers, retailer managers and stock specialists.
Final month, Walgreens’ high govt stated that the corporate was seeing a 52% enhance in “shrink” — an trade time period which suggests lack of stock that can’t be accounted for by way of gross sales or different respectable means.
Tim Wentworth, CEO of dad or mum firm Walgreens Boots Alliance Inc, stated that anti-theft measures reminiscent of locking up gadgets behind glass encasing led to decreased gross sales.
The affected Walgreens places in Southern California will shutter for good between March 20 and March 27 — with layoffs various from eight to 27 workers per location.
Marty Maloney, Walgreens’ director of media relations, cited rising regulatory and reimbursement pressures as key components contributing to the choice.
“It’s by no means a simple choice to shut a retailer,” Maloney advised the Los Angeles Day by day Information.
“We all know that our shops are essential to the communities that we serve, and subsequently do every part attainable to enhance the shop efficiency.”
Malone added that the corporate “will work in partnership with group stakeholders to attenuate buyer disruptions.”
Walgreens, one of many largest pharmacy chains in the USA, has been grappling with monetary difficulties in recent times — which have been exacerbated by declining foot visitors, elevated labor prices and decrease reimbursement charges for pharmaceuticals.
Within the final 5 years, the inventory worth of dad or mum firm Walgreens Boots Alliance Inc. has plummeted by a whopping 82%.
In July 2015, the inventory reached document highs north of $90 per share. As of Wednesday morning, it was buying and selling at simply $9.36 per share.
The COVID-19 pandemic initially boosted revenues attributable to demand for vaccinations and testing, however because the disaster waned, gross sales softened whereas operational prices remained excessive.
The corporate has additionally been weighed down by authorized settlements associated to opioid litigation.
Walgreens, together with different main pharmacy chains, agreed to pay billions in settlements after being accused of contributing to the opioid disaster by failing to correctly monitor the distribution of prescription painkillers.
In response to those monetary strains, Walgreens introduced plans final 12 months to shut underperforming shops throughout the nation.
The corporate has not disclosed an actual quantity, however trade analysts estimate that a whole lot of places could possibly be shuttered.
In a January earnings name, Walgreens CEO Tim Wentworth indicated that retailer closures and operational restructuring are a part of a broader technique to streamline bills and enhance profitability.
Walgreens just isn’t alone amongst pharmacy retailers which might be struggling amid shifting client behaviors, rising operational prices and authorized challenges.
Ceremony Support, which filed for Chapter 11 chapter in late 2023, has already introduced the closure of greater than 100 shops nationwide, together with 31 in California.
The corporate has been making an attempt to restructure its debt whereas coping with its personal opioid-related lawsuits and declining gross sales.
CVS, Walgreens’ essential competitor, can be within the midst of a strategic downsizing plan.
In 2021, the corporate introduced that it will shut 900 shops over three years because it shifts focus towards increasing its healthcare providers and digital presence.
Like Walgreens, CVS has confronted decreased foot visitors and rising prices, prompting it to re-evaluate the profitability of sure places.
Past the pharmacy sector, conventional brick-and-mortar retailers have been struggling as effectively.
Main manufacturers reminiscent of Mattress Tub & Past, Household Greenback and Macy’s have closed shops in latest months attributable to declining in-store gross sales and growing competitors from e-commerce platforms.
The broader retail trade has seen a shift towards on-line buying and same-day supply providers, making it more and more tough for bodily shops to stay worthwhile.
The closures of Walgreens shops in Southern California will doubtless have a major impression on native communities, significantly people who depend on these places for important medicines and on a regular basis home items.
In some neighborhoods, Walgreens serves as one of many few simply accessible pharmacies, particularly for aged residents and people with restricted transportation choices.