Boots business revamp to await new management
Report recommends widespread changes
January 20 2003
Boots will wait until a new chairman and chief executive are in place before acting on a report recommending fundamental changes to the business.
Management consultants McKinsey, commissioned to undertake a thorough review of the business last year, are said to have made recommendations including selling off the Boots Healthcare International manufacturing operation, and cutting back on the added value Wellbeing healthcare services.
Boots chairman John McGrath is due to step down at the company’s AGM in July 2003, in favour of current vice-chairman Sir Nigel Rudd. A search is also underway for a successor to chief executive Steve Russell. This search was undertaken with the full knowledge and support of Steve, with Safeway’s Carlos Criado-Perez the latest name linked to the post.
The Daily Telegraph quotes sources close to Boots saying : “It would seem rather foolish to embark on a strategic change before getting the new management in place.”
McKinsey’s review of the business predates the publication of the report into the UK retail pharmacy market by the Office of Fair Trading, announced last week, but the need to revitalise the Boots’ business has been given new urgency by the likely opening up of the UK pharmacy market to increased competition.
Boots has said that deregulation would create an opportunity to expand its pharmacy business. The McKinsey review, whuch is ongoing, is also understod to have recommended a renewed focus on Boots’ core retail strengths.
Boots in-store Welllbeing services include opticians, dentistry, and footcare as well as health & beauty services such as the launch last year of Botox treatments. Its healthcare business includes brands such as Clearasil, Strepsils and E45.
