'It might be gutted' – Boots braces for dose of private equity's bitter medicine

The 176-year-old chemist is preparing to change hands again.

- Sarah Butler

“We've had several rounds of cost-cutting and it could happen again,” says a Boots worker. Fears are running high as the Nottinghamshire-based chemist prepares to change hands - perhaps twice in quick succession.

The US private equity firm Sycamore Partners is close to finalising a $10bn (£7.8bn) deal to take over the listed US owner of Boots, Walgreens Boots Alliance.

Experts say Sycamore is then likely to sell off assets, having previously employed this tactic with varying degrees of success at office supplies group Staples and the former owner of the footwear brand Kurt Geiger, Jones Group. It could look at picking off some aspects of Boots - such as stores, property or brands - but is more likely to sell on the entire business.

Boots, which operates more than 1,800 stores and employs about 51,000 people - including about 6,000 at its headquarters in Beeston, three miles south-west of Nottingham - has already been unsuccessfully put on the block by Walgreens at least twice in recent years, with a valuation of as much as £5bn.

The company has changed hands several times in the past 20 years. After a merger with Alliance Unichem in 2006, the combined firm was taken over by private equity firm KKR in 2007, before Walgreens first took a 45% stake in 2012 and then completed a takeover at the end of 2014.

But there are concerns now that this latest change of ownership could see the chain of stores, many of which already need more investment in equipment, staff and maintenance, take another hit.

Nowhere is that more keenly felt than in Nottingham, where Boots is the city's biggest private-sector employer and has been a key to its identity since founder John Boot opened a small herbalist store on Goose Gate in 1849. The group has been based at its 112-hectare headquarters site in Beeston since 1927.