Boots, one of the UK’s most recognised high street retailers, is reportedly on the verge of an £8 billion sale as its US-based owner, Walgreens Boots Alliance, faces mounting financial challenges.
According to Bloomberg, private equity firm Sycamore Partners is in advanced discussions to acquire the pharmacy and beauty giant, with a formal announcement expected as early as this week.
The potential sale follows the closure of 300 Boots stores across the UK at the end of 2024, a move aimed at cutting costs and streamlining operations.
Despite the reduction in store numbers, retail sales have surged by 8.1% year-on-year, while online sales have risen by 23%.
Walgreens Boots Alliance previously announced plans to close 650 stores globally in an effort to save £618 million. Currently, Boots operates around 1,800 stores across the UK.
If the sale to Sycamore Partners goes through, it could result in the company being split, with the possibility of Boots being floated on the London Stock Exchange.
Retail analysts suggest that a stock market listing could be attractive to investors. Jonathan De Mello, CEO of JDM Retail Consultancy, commented:
“Boots has performed well over the past few years and is a leaner business overall now with fewer stores and staff, and no pension scheme liability. A stock market listing of Boots could potentially be quite attractive for investors at this point.”
Similarly, retail expert Nick Bubb noted that Boots is “very floatable,” especially given the post-pandemic boom in health and beauty sales.
Walgreens Boots Alliance has faced financial difficulties in recent years, with its market value plummeting by 80%. The company has been looking for ways to reduce costs and refocus its business strategy.
Meanwhile, other major UK retailers are also experiencing pressure. Poundland’s parent company, Pepco, recently announced it is exploring strategic options, including a potential sale, due to rising costs and a challenging retail environment.
Founded in Nottingham in 1849, Boots has been a staple of British high streets for over 175 years, providing pharmacy services, beauty products, and healthcare essentials.
As discussions over its future continue, shoppers and investors alike will be watching closely to see how this iconic retailer adapts to the evolving retail landscape.
