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Alliance Boots’ partnership with Walgreens is expected to help fulfill Boots’ vision of spreading beauty across the globe.
This story first appeared in the May 24, 2013 issue of WWD. Subscribe Today.
“We are going to create a new, unique entity — the largest health-care company at the global level. This merger allows us to further internationalize our beauty business,” said Gordon Farquhar, chief executive officer of Boots USA.
Walgreens purchased a 45 percent stake in Alliance Boots in June — a move seen as a win-win proposition for both companies.
For Boots, it offers an avenue to spread its theme of improving people’s well being across the globe. “It’s part of our DNA. We are closing the gap between health and beauty,” he said of the more-than-3,000-store chain with operations in Europe, the Middle East and the Far East that ranks as the leading international pharmacy and health and beauty purveyor. “We are passionate about leading changes to the industry.”
Boots’ offer doesn’t have one particular demographic, he said, but targets all women because everyone deserves to look and feel their best. Beauty is aspirational and unites people from all continents and socio-economic classes, he added.
Admitting Boots isn’t the first one to “go across the pond,” he called the strategic deal with Walgreens a milestone for the beauty industry and a way to help even more people look and feel their best.
There is much potential in the business, he added, as people live longer — boosting the need to feel confident and look good as a competitive advantage when seeking jobs and even forging new relationships (citing data that many people will be dating in their 70s and needing to look their best).
Boots distributes more than 250 million items, some of them the most trusted names in the world, such as its No7 skin care, sold in the U.S. in both Target and Walgreens. Other notable items include Soltan, Botanics and its latest serum Lift and Luminate Day and Night Serum — all developed in its laboratories and backed with scientific research. Boots also has a healthy loyalty program (Advantage Card) yielding rich consumer insight. “This is a fundamental aspect of our work,” he said.
Farquhar was quick to add that Boots’ rollout in Walgreens will be scrutinized and not rushed. Instead, there will be learnings about the channel and understanding the consumer better. “If we are going to launch this brand and take it to the next level, we have got to do it with a lot of insight. It is a different channel, and we have to learn a lot,” Farquhar said.
For now, he ruled out opening freestanding Boots stores in America, although he left the door open to import some of the brands that perform well in Boots across the world. “Why open in the U.S. with store number one or two or three stores against a CVS or a Walgreens?” he said. “Instead you find different ways to partner. I would not change Boots in the U.K., nor would I change Walgreens in the U.S. They both have over 100 years of experience.”
What has impressed him to date is the worldwide knowledge of the Boots logo. “It is quite interesting how many people know our brand.”
He also noted Boots must alter its approach on a market-by-market basis. For example, pharmacy chains are not allowed in France, so Boots had adapted a different growth model. “What we’ve been able to do is to take the essence of what Boots is, and we find we’ve been able to do it in different ways and different partnerships to bring the Boots model there,” he said. “We have to do different things.”