ALLIANCE Boots, the chemist, said yesterday it will slash 1,500 jobs at its pharmaceutical wholesale arm, in a bid to save £55m a year to brace itself for “the most difficult market conditions” ever seen at the division.
The group pledged to cut the division’s staff by 10 per cent, even though its underlying profits across the group jumped 11.3 per cent in the year to the end of March to £1.24bn.
The numbers mark its first full year results as a private company.
The firm said its No7 cosmetic range helped boost sales and remained the UK’s market leader with strong demand for its anti-ageing skincare products.
The group added it launched a number of new No7 products throughout the year.
Charles Stanley analyst Sam Hart said the job cuts looked “sensible”.
Alliance Boots was bought by private-equity house KKR two years ago in a £12bn deal led by Italian tycoon Stefano Pessina that loaded the group with massive debts.
Pessina, who is the retailer’s executive chairman and owns 15 per cent of the company, has always insisted that he plans to grow the business by expanding across Europe and by offering better service to customers, rather than strip assets.
Pessina said: “I am pleased, indeed I can’t hide how proud I am, that Alliance Boots has once again achieved strong growth in revenue, earnings and trading profit, despite the challenging environment.”
He denied the company has too much debt, despite its borrowings now standing at £9bn, up from £8.7bn last year. This compares with £1.2bn prior to his taking the combined company private.