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Billionaire Boots boss loses $2 billion amid share price drop

Katie Ross
03 June 2024

Stefano Pessina, Executive Chairman of the Walgreens Boots Alliance, has lost £1.6 billion ($2 billion) in one year as Boots’ share price plummets.

The 82-year-old Italian businessman is the company’s largest shareholder, and the market value of his holding in Walgreens has fallen from £3.5 billion ($4.4 billion) to £1.7 billion ($2.2 billion) in the past year, according to FactSet Data.

Shares in Walgreens have dropped by just over 40% in the past year, according to The Times. Meanwhile, the S&P 500 share index has increased by 9%. Last week, the stock hit its lowest level since the 1990s, being valued at£11.52 ($14.63).

Walgreens has more than 330,000 staff and 12,500 stores and has suffered from high debt as a result of an aggressive acquisition spree. Operating losses surged to £9.6 billion ($12.2 billion) in the first half of the financial year, combined with a loss of £4.7 billion ($6 billion) in the previous year. This reflects a £4.6 billion ($5.8 billion) impairment charge on its investment in US primary care provider VillageMD.

The US pharmacist and healthcare retailer suffered reputational damage as a result of its 2013 agreement with Theranos, Elizabeth Holmes’ fraudulent blood-testing business, to conduct pilot blood tests in some of Walgreens’ stores. The fraud was revealed in 2015, with Walgreens agreeing to pay £34.6 million ($44 million) to settle a class-action lawsuit pertaining to the fake blood tests.

Boots, on the other hand, achieved a 32.3% increase in pre-tax profits to £237.6 million for the 12 months to August 2023, due to higher profit margins, according to recent filings for three UK subsidiaries at Companies House.

Revenue rose to £8.3 billion from £7.7 billion, reportedly driven by its beauty brands, including Rihanna’s Fenty Beauty, Liz Earle and Soap & Glory.

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