Beauty format's success behind Walgreens expansion into 1,000 additional stores

DEERFIELD, Ill. — Walgreens will be bolstering its beauty proposition with the addition of "Beauty Differentiation" formats across more than 1,000 additional stores this year, the company reported earlier this week. The move is being precipitated with the hiring of beauty consultants who add a personal customer service touch to the offering.

"We think the opportunity inside of a drug store is to move toward a health and beauty convenience specialist," noted Alex Gourlay, co-COO Walgreens Boots Alliance. "That's where we're seeing the investment and the growth right now," he said. "The future of the business will be focused on many ideas but we're absolutely making the most of the 8 million customers who use Walgreens today, both online and in the pharmacies, and also developing  a more appropirate beauty offer."

With the expansion of Walgreens' beauty strategy into an additional  1,000 stores "shows the confidence we have in this strategy," he said.

"We have now recruited beauty [consultants] across more than 1,800 stores, which is helping to drive No7 sales and gross profit," George Fairweather, EVP and global CFO Walgreens Boots Alliance, told analysts. "Repurchase levels of No7 products have been very encouraging and Soap & Glory has also gotten off to a good start."

That level of success across Walgreens' exclusive brands has set the stage for the next launch, Fairweather said. "Following the successful introduction of No7 and Soap & Glory, we're planning to introduce another of our own brands, Botanics, into our existing 'Beauty Differentiation' stores in the next six months."


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