Walgreens to Shut Down Walgreens to Shut Down Walgreens to Shut Down

Walgreens Boots Alliance Inc. said Thursday it is shutting down two websites—Drugstore.com and Beauty.com—five year after acquiring them, a sign of how traditional retailers continue to struggle with online properties.

The retailer acquired both sites as part of its $429 million acquisition of Drugstore.com in 2011. At the time, Drugstore.com and its affiliated sites were the eighth largest pureplay online retailer, according to Internet Retailer Magazine.

Walgreens new management has started to unwind that acquisition to focus its online business on its own website devoted to its flagship drugstore chain, according to a Thursday regulatory filing. Earlier this year, Walgreens sold Skinstore.com, another vestige of the Drugstore.com acquisition, to the Hut Group, a U.K. online retailer, according to a company spokesman, who didn't specify the sale price.

The company is still trying to fine tune its e-commerce strategy but clearly wants to focus more of its resources on one main site. "They want to make sure they can invest more of the equity in Walgreens.com," said Brian Owens, a director at the consultancy Kantar Retail. "Drugstore.com and Beauty.com are distractions."

Other retailers have picked up pure-play e-commerce sites, only to shut them down shortly thereafter. Target Corp. last year shuttered ChefsCatalog.com and Cooking.com, less than three years after buying them.

Walgreens currently ranks as the 37th largest online retailer in North America, according to Internet Retailer, which estimates that its online sales were $1.3 billion last year. Its U.S. pharmacy sales last year were $81 billion.

The company said in the filing it plans to close the two sites by the end of September and that it will record a $115 million pre-tax charge related to the shutdown. The move is part of a broader cost saving plan to shed $1.5 billion in annual costs by the end of its next fiscal year, the company said.

An undisclosed number of jobs will be eliminated in Bellevue, Wash., the company spokesman added, declining to provide details on how much the company expects to save from the closures.

Walgreens will continue to operate VisionDirect.com, which sells contact lenses and was also part of the Drugstore.com acquisition, according to the company spokesman.

Write to Paul Ziobro at [e-mail]

(END) Dow Jones Newswires

July 28, 2016 13:35 ET (17:35 GMT)

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