Boots merger puts new focus on North America

By Simon Pitman

- Last updated on GMT

Related tags: Alliance boots, Alliance unichem

Having confirmed its merger with Alliance Unichem at the end of
July, newly named Boots Alliance says it is eyeing further
expansion of its cosmetic lines in retail outlets throughout the
US.

A company spokesperson recently confirmed that it was in discussions with CVS to enter the next phase of its roll-out, which could see the geographic reach of its sales extended as far as Florida.

Boots Alliance entered the US through drugstore chain CVS back in 2004 and has since been undertaking a carefully planned expansion of its line all over the country that currently includes 50 stores. To date those sales have concentrated on key urban areas in California and the North East coast.

Back in May of this year the company acknowledged that a number of its cosmetic and beauty lines had proved to be top selling items, after it stated that sales there had proved to be 'very encouraging'.

It has been selling own-brands such as No. 7 cosmetics, Botanics, Time Delay and Mediterranean skin care in Target and CVS stores all over the US, where the products are said to have proved a particularly big hit with shoppers in New York City.

Talks with Target executives are thought to be on-going as Boots products also continue to sell well at 150 of the mass market retailer's outlets.

The Alliance Boots roll-out in the US has been carefully planned, incorporating conservative expansion in to key markets and geographic areas. This follows some less successful ventures in Japan and Europe that failed following rapid expansion.

CVS says that the plan to expand the roll-out should help serve to increase sales for its cosmetic and skin care categories across its pan-US stores.

The company is already the leading US drug and pharmacy store, with more than 6,100 stores across 44 states contributing to yearly sales in excess of $40bn.

The Alliance Boots merger is also expected to give the company further expansion possibilities on the European front. Boots is already adding its health and beauty ranges into Alliance's 1,200 stores throughout the UK.

It has also said that future plans could use Alliance's European network of stores to stock its No 7 cosmetic range and its Soltan sun care range.

"Looking ahead our immediate focus is to commence the delivery of the identified cost synergies of at least £100 million per annum by the fourth full year,"​ said Richard Baker Alliance Boots chief executive.

"The first stage of this work has already started and we are confident of delivering £60 million of annualised savings by the end of the second year,"​ Baker added.

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