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Walgreens to Close In-Store Clinics, Making Way for New Services

The move is part of an effort to cut costs and focus on other in-store partnerships.

(Bloomberg)—Walgreens Boots Alliance Inc. said it will close 157 of its retail clinics by the end of the year as it focuses on cutting costs and expanding other retail partnerships.

The clinics offer basic health-care services for vaccinations, health tests and minor injuries. Walgreens plans to keep about 220 in-store clinics operated by outside health organizations.

“We’ve taken the decision to exit our wholly-owned, loss-making clinics, but we will continue to work with our local health system partners,” co-chief operating officer Alex Gourlay said on a conference call with analysts.

Walgreens, which operates about 9,000 pharmacies around the U.S., is cutting costs and reshaping its offerings amid pressure on front-of-the-store retail sales of products like cosmetics, food items and household goods. As rival CVS Health Corp. has leaned into offering in-store health services, Walgreens has announced partnerships with grocery company Kroger Co., delivery service FedEx Corp. and, on Monday, weight-loss company Jenny Craig.

Walgreens said it will offer Jenny Craig meal-planning and weight-loss consultations at 100 locations starting in January 2020. Under an existing deal with medical-testing company LabCorp, customers will be able to get blood and other lab tests in at least 600 Walgreens stores in the next few years.

Walgreens is the largest remaining stand-alone drugstore chain in the U.S. The Deerfield, Illinois-based company on Monday raised its 2022 annual savings target from its overall cost-cutting plans to $1.8 billion, up from $1.5 billion, as part of its fiscal fourth quarter earnings announcement.

Not all of the in-store health clinics will remain closed. Seven of the internally managed clinics in the Cincinnati area will reopen under new management by TriHealth, a local health system, according to Walgreens.

Walgreens shares were down 0.7% to $55.05 at 1:06 p.m. in New York. Read more on the company’s quarterly results here.

To contact the reporter on this story: Robert Langreth in New York at [email protected].

To contact the editors responsible for this story: Drew Armstrong at [email protected]

Timothy Annett

© 2019 Bloomberg L.P.

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