OPERATIONS

Walgreens-Alliance Boots deal sealed; senior leaders join respective boards

BY Katherine Boccaccio

Deerfield, Ill. — Walgreens and Alliance Boots on Thursday announced the completion of Walgreens initial investment in the strategic partnership following receipt of all required regulatory approvals.

The Walgreens investment consists of approximately $4 billion in cash and 83.4 million shares of Walgreens common stock in exchange for a 45% equity stake in Alliance Boots. Walgreens has the option to proceed to a full combination in approximately three years’ time by acquiring the remaining 55% of Alliance Boots.

As a result of the transaction, Alliance Santé Participations S.A., of which Alliance Boots executive chairman Stefano Pessina is a director and whose ultimate ownership is a family trust, becomes the largest shareholder of Walgreens, with a stake it intends to hold for the long term.

In line with this, Pessina and Dominic Murphy, member of the general partner of KKR & Co., have joined the Walgreens board. At the same time, Walgreens’ president and CEO Greg Wasson; Wade Miquelon, executive VP and CFO; Thomas Sabatino, executive VP and general counsel; and Robert Zimmerman, senior VP and chief strategy officer, have become members of the Alliance Boots board.

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FINANCE

Hhgregg loss widens in Q1; on track for up to 22 stores in 2013

BY Katherine Boccaccio

Indianapolis — Hhgregg reported Thursday a loss of $5.7 million for the quarter ended June 30, compared with a loss of $0.8 million in the year-ago period. The electronics and appliances retailer cited higher expenses coupled with same-store sales declines for the poor performance.

Net sales increased 13.5% to $489.9 million from $431.5 million, and same-store sales decreased 5.1%.

“Our first fiscal quarter proved to be more challenging than anticipated with sales and earnings coming in below our original expectations,” said Dennis May, president and CEO. “We reacted to the sales shortfall by making adjustments to our cost structure. We expect subsequent quarters to benefit from our cost cutting measures.”

The company said it still plans 20 to 22 new store openings in fiscal 2013.

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FINANCE

Body Central Corp. profit dips in Q2

BY Katherine Boccaccio

Jacksonville, Fla. — Body Central Corp., which operates 258 stores under the Body Shop and Body Central banners, reported Thursday that net income for the second quarter dropped to $3.4 million, from $5.3 million in the year-ago period.

Revenues climbed 6.3% to $79.4 million, and same-store sales decreased 7.6%.

The company opened 15 new stores and closed one during the second quarter.

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