By all rights, Boots should no longer exist. The UK retailer is 177 years old, and has spent decades fighting to keep its footing on a high street that has seen waves of new challengers and technological threats, killing off countless other retailers. Yet this week the UK chain was bought by Canada's Weston family for a respectable $8.9bn, suggesting it has a reasonable future ahead of it.
One thing that sets Boots apart from other retailers is its pharmacy licence, and its ability to get customers who come in for prescriptions to buy other things too. By the mid nineties, non-prescription sales were roughly 85 per cent of revenue. Boots is now more reliant on its health division than it was, and beauty and wellness are a growing trend. Its next opportunity may lie in offering more services, as well as products, such as in-store makeovers and health checks.
For retailers, old age actually appears to confer some advantages — such as a general sense of affection from customers. Fewer than 1 per cent of active businesses registered with Companies House are over a century old, but a disproportionate share of them are in consumer businesses. Other centenarians include Twinings Tea and fashion brands Barbour and Burberry.
That points to the third reason for optimism: the Westons, who say they want to improve Boots "for generations to come", can take a long-term view on the business without the pressures of private investors or public markets. Having come this far, perhaps Boots will see in its third century too.
Source: Financial Times Companies · Summarized by HeadlinesBriefing