Boots owner Walgreens in talks over sale to private equity, casting doubt over chemist’s future

Walgreens, the US-based owner of Boots, is in talks to sell itself to a private equity company, casting the high street chemist’s future into doubt.

Walgreens could be bought out by Sycamore Partners, a US firm which owns the stationary brand Staples, according to the Wall Street Journal.

The potential sale comes following a difficult time for Walgreens. Its shares have tumbled from more than $25 (£20) apiece in January to just over $10 (£8) today. The value of the company has been on a downward trend since 2015 when its shares traded at more than $95 (£75).

It has faced stiffer competition from online retailers like Amazon and its margins on medicine sales have been put under pressure by insurers, the Wall Street Journal reported.

Walgreens reported a loss of $3bn (£2.35bn) in the fourth quarter of the year compared to a loss of $180m a year earlier.

Walgreens operates 12,000 stores around the world including its 1,900-strong Boots network. It bought a share of Boots in 2012 and fully took over the brand in 2015.

Private equity companies often buy up troubled firms which are listed on stock exchanges with a view to improving their profit, sometimes by cutting underperforming parts of the business.

Since buying Staples in 2017, it has closed about a quarter of its stores in the US, going from 1,255 in that year to under 900 today.

Boots has outperformed much of the rest of the business, which could make it the target of another sale.

The deal could hand ownership of Boots to Stefano Pessina, the billionaire who controls Walgreens, Sky News reported.

Walgreens has tried to sell the brand twice before.

The company dates back to Nottingham, where John Boot began selling remedies in 1849.