Walgreens to Shut Down Walgreens to Shut Down Walgreens to Shut Down
July 28 2016 - 1:50PM
Dow Jones News
Walgreens Boots Alliance Inc. said Thursday it is shutting down
two websites—Drugstore.com and Beauty.com—five year after acquiring
them, a sign of how traditional retailers continue to struggle with
online properties.
The retailer acquired both sites as part of its $429 million
acquisition of Drugstore.com in 2011. At the time, Drugstore.com
and its affiliated sites were the eighth largest pureplay online
retailer, according to Internet Retailer Magazine.
Walgreens new management has started to unwind that acquisition
to focus its online business on its own website devoted to its
flagship drugstore chain, according to a Thursday regulatory
filing. Earlier this year, Walgreens sold Skinstore.com, another
vestige of the Drugstore.com acquisition, to the Hut Group, a U.K.
online retailer, according to a company spokesman, who didn't
specify the sale price.
The company is still trying to fine tune its e-commerce strategy
but clearly wants to focus more of its resources on one main site.
"They want to make sure they can invest more of the equity in
Walgreens.com," said Brian Owens, a director at the consultancy
Kantar Retail. "Drugstore.com and Beauty.com are distractions."
Other retailers have picked up pure-play e-commerce sites, only
to shut them down shortly thereafter. Target Corp. last year
shuttered ChefsCatalog.com and Cooking.com, less than three years
after buying them.
Walgreens currently ranks as the 37th largest online retailer in
North America, according to Internet Retailer, which estimates that
its online sales were $1.3 billion last year. Its U.S. pharmacy
sales last year were $81 billion.
The company said in the filing it plans to close the two sites
by the end of September and that it will record a $115 million
pre-tax charge related to the shutdown. The move is part of a
broader cost saving plan to shed $1.5 billion in annual costs by
the end of its next fiscal year, the company said.
An undisclosed number of jobs will be eliminated in Bellevue,
Wash., the company spokesman added, declining to provide details on
how much the company expects to save from the closures.
Walgreens will continue to operate VisionDirect.com, which sells
contact lenses and was also part of the Drugstore.com acquisition,
according to the company spokesman.
Write to Paul Ziobro at Paul.Ziobro@wsj.com
(END) Dow Jones Newswires
July 28, 2016 13:35 ET (17:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Target (NYSE:TGT)
Historical Stock Chart
From Aug 2024 to Sep 2024
Target (NYSE:TGT)
Historical Stock Chart
From Sep 2023 to Sep 2024