Walgreens to shutter 600 stores by next spring as part of Rite Aid purchase
DEERFIELD, Ill. — Walgreens Boots Alliance expects to shutter about 600 stores in the wake of its purchase of 1,932 stores from rival Rite Aid.
The closings will start next year and take place over 18 months, Walgreens CFO George Fairweather said on the chain’s quarterly earnings call. The stores marked for closing will mostly be Rite Aid locations. The retailer expects to close stores within a mile of another Walgreens or Rite Aid location.
Walgreens won regulatory approval in September to buy 1,932 stores and three distribution centers from Rite Aid for $4.38 billion.
In its quarterly earnings report released Wednesday, Walgreens said the first few Rite Aid locations have been acquired in the past week. Ownership of the remaining stores is expected to be transferred in phases and be completed by spring 2018.
Walgreens expects to complete the integration of the acquired stores and related assets within the next three years for an estimated cost of approximately $750 million, which will be reported as acquisition-related costs. The company also plans to spend approximately $500 million of capital on store conversions and related activities.
During the company’s quarterly earnings call, leadership highlighted Walgreens’ commitment to a fluid go-to-market strategy that is constantly evaluating customer behavior.