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Battered by a more cost-conscious consumer who is seeking out better values at retailers like Walmart (WMT) and Costco (COST), Walgreens Boots Alliance's (WBA) retail business has struggled, weighing on both the company and its stock, which has plunged by 67% since the beginning of 2023. Seeing the writing on the wall, WBA's turnaround plan has centered on expanding its pharmacy and U.S. healthcare businesses, while deemphasizing the retail business, including Boots UK. In fact, over the past few years, WBA has unsuccessfully tried to sell Boots, the British health and beauty retailer it acquired in 2012, prompting Boots' Managing Director, Sebastian James, to depart the company.

• According to Reuters, Mr. James is leaving Boots as WBA's attempts to sell the UK retailer have stalled out. With the cash infusion from a sale seemingly not on the near-term horizon, and with WBA accelerating its efforts to move away from the retail business, Mr. James has reportedly decided to take a new role at Veonet, a Germany-based eye surgery company.
• The departure is yet another discouraging development for a shareholder base that may be running out of patience as WBA's turnaround fails to gain traction. Divesting Boots would represent a significant step in WBA's transformation plan, generating a significant amount of capital that could be reinvested into the healthcare business. Since 2021, WBA has been looking to make a deal to sell Boots, but it has yet to receive a bid that it believes fairly values the business. 
• Under WBA's ownership, Boots performance over the years has been choppy. However, it is coming off a solid Q3 in which retail same-store sales grew by 6% and pharmacy same-store sales increased by 5.8%. That performance was relatively stronger than the U.S. Retail Pharmacy segment, which delivered sales growth of 2.3% that was entirely driven by comparable pharmacy sales.
• It's not just the UK retail operation that WBA is looking to dispose of, though. During the Q3 earnings call, CEO Tim Wentworth, who took the reins last October, disclosed that WBA plans to close a substantial portion of its 8,700 U.S. locations over the next three years. More specifically, the company will evaluate closing about 25% of its locations.
• Meanwhile, WBA will also focus on improving the results of its U.S. pharmacy business. Although pharmacy has generated stronger results compared to the retail side, posting comps of +5.7% in Q3 due to healthy prescription growth, it's still facing decreasing reimbursements from pharmacy benefit managers (PBM) like CVS Caremark (CVS) and Cigna's Express Scripts (CI). The good news for WBA is that Mr. Wentworth has plenty of experience in the PBM industry, previously serving as CEO of Express Scripts.

The main takeaway is that after several years of disappointing results from WBA, investors want to see some meaningful progress on its transformation efforts and today's revelation that a divestiture of Boots isn't forthcoming may be adding to the frustrations.