Britain's top health and beauty retailer, Boots Group, is to invest £250m sterling in a revamp of its local pharmacies and supply chain, but up to 2,250 jobs could go as distribution depots close.
As part of the changes, 50 staff at Boots' Belfast warehouse are to lose their jobs, it was confirmed this afternoon. Ten of the 50 people employed at the Belfast warehouse work part-time.
Boots, whose acquisition of drugs distributor and retailer Alliance UniChem Plc was effectively cleared by UK competition authorities today, said 700 of its smaller stores will be given a major overhaul under a single brand.
The three-year investment at the 1,400-strong chain will see £70m pumped into a new hi-tech automated warehouse in the English city of Nottingham. But this will eventually lead to the closure of 17 regional warehouses and a similar number of smaller depots, with up to 2,250 job losses out of a group total of 45,000 full-time equivalents.
Many of these employees will be redeployed either through relocation to nearby stores or the Alliance Unichem merger, and others would go through natural wastage, CEO Richard Baker said today. 'This is another step forward in modernising the retail chain. It's the biggest single commitment given by a large retailer to the local high street,' he said.
Usdaw, the main trade union for Boots employees, said there was no need to panic given the long timescale of the redundancies and what it called its 'long standing and positive relationship' with the company.
The move comes as Boots seeks to spend some of the £400m it has kept back from the £1.9 billion sale last year of its over-the-counter drugs portfolio Boots Healthcare International (BHI). Of the remaining £1.5 billion, £1.4 billion has already been returned to shareholders.
Consequently, the announcement should not affect analysts' pre-tax profit forecasts of around £380m for the current year, a Boots spokesman said.
Separately, the Office of Fair Trading said undertakings proposed by Boots over the Alliance Unichem deal would be sufficient to ease competition concerns. In February, the consumer watchdog said it would give the green light if the enlarged group offered to sell up to 100 stores.
