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The Pharmaceutical Journal Vol 264 No 7100 p873
June 10, 2000 Business

Boots to open gyms as it expands emphasis on health and beauty

Boots the Chemists Ltd is to expand its health and beauty offering by opening fitness centres and extending the services provided in its larger stores. Another development is an online photographic service to be launched this year.
Two of Boots's larger stores, at Kensington High Street, London, and Milton Keynes, are to be refurbished over the summer as pilots for the wider health services. From September they will offer a wide range of health services, including homoeopathy, herbalism and osteopathy, and beauty services, including massages, pedicures, manicures and laser hair removal. Lifestyle advice on weight management, smoking and stress will be available.
Two pilot fitness centres are to be opened early next year under the name Boots Body 360°. They will offer the same health and beauty services as the refurbished stores and will have exercise studio, gym, swimming, sauna and hairdressing facilities. The pilot centres will be in London and Northwich.

gym
Two pilot fitness centres are to be opened early next year under the name Boots Body 360°

Speaking at the Boots Co Plc's annual results presentation on June 1, to which the media was not invited, Mr Steve Russell (chief executive, Boots) said that the experience gained from the Boots the Chemists concept stores would lead to changes at the company's larger stores. Merchandising, displays and promotions would be changed at 275 stores, with an "accelerated exit from less profitable leisure ranges". Some stores would be totally remodelled and "well-being" services, such as dentistry, chiropody and laser hair removal, would be included. The first branches to be refitted will be at Chelmsford and Crawley.
For the year to March 31, turnover at the Boots Co rose by 5.6 per cent to £5.2bn. Pre-tax profits of £561m were up by 230 per cent on the previous year's figure of £170m, a figure which was depressed by writing off the company's investment in the Do-It-All chain. Discounting this, pre-tax profits rose by 2 per cent. Boots spent £17.7m on group strategic initiatives - new projects not currently allocated to any division. These include the expansion of the dental chain, the fitness centres and internet services.
Sales at Boots the Chemists rose by 4.1 per cent to £3.98bn or by 1.8 per cent on a like-for-like basis. Operating profits were £470m after restructuring costs of £22m for the company's new head offices at Nottingham. Mr Russell said that Boots had faced severe price competition on toiletries. It had lost 0.6 percentage points of market share on over-the-counter medicines, but "dispensing throughput continued to increase". At the year-end, Boots had 1,404 stores, including 55 in edge-of-town sites.
Boots Retail International lost £33m on a turnover of £33m; however, the stores in Thailand were expected to be profitable this year. Boots now has 69 overseas stores, excluding those in Ireland.
Boots is to expand its dental chain to 50 practices this year at a cost of £20m. All new practices are to be within Boots the Chemists stores. Each is expected to have a turnover of over £1m within two years. The dental chain will become a separate division.
Boots is to offer its photographic customers the opportunity to have their pictures saved on a new website (www.bootsphoto.com). From July, customers having their films processed at Boots will be able to have their images uploaded onto their own password protected "album" on the site, allowing friends and family to view the pictures. Revenue is expected to come from the sale of reprints and other merchandise. Reprints will be available for collection from any Boots store.
The website will also have an online booking service for professional photographers and a library of pictures for subscribers' use.