Boot promises profit

Boots’ chief executive Richard Baker has stated that the company’s financially troubled international retail arm will deliver a profit in 2006. Boots International made a loss of £40m in 2003. Baker, who speaking at Retail Week’s annual conference, said that expanding the international business was a critical driver behind its proposed merger with Alliance UniChem. He added: “The great thing is that there is no brand trying to occupy international pharmacies and we do see a real opportunity to take this brand outside the UK.”

Baker also pointed to other areas that will be crucial to the success of Boots in the UK, including home delivery. “When the pharmacy business goes to e-mail and not prescriptions there will be an important role for home delivery,” he commented. The Alliance merger is expected to help with this by providing more pharmacies that are closely situated to GP surgeries.

Boots is also planning to invest £250m in its community pharmacies and supply chain. The money will come from the proceeds of the £1.9bn sale of Boots Healthcare International to Reckitt Benckiser.

The company says the investment will concentrate on three key areas: improving 700 smaller stores for both staff and customers to

reinforce Boots’ position as a community chemist, modernising and automising the supply chain and restructuring its IT arrangements.

The improvement to the supply chain will involve a £70m fully automated order-picking warehouse in Nottingham, which will result in 2250 job losses.