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August 4, 2025
Walgreens Thinks the Grass Is Greener in Private Equity: What Happens Next for Retail, Beauty, and Pharmacy?
Walgreens Boots Alliance is going private in a $10 billion deal with Sycamore Partners. The move is framed as a way to restructure away from public market scrutiny, but the implications extend well beyond ownership. With Boots, its U.K.-based beauty and pharmacy chain, also in the mix, the deal is likely to reverberate through adjacent categories and international markets.
A Shift From Public Markets to Private Mandates
Sycamore will become the latest private equity firm to take control of a top-20 U.S. retailer. Walgreens has struggled with declining foot traffic, increased competition, and an overstretched store base. The company had already committed to $1 billion in cost cuts and a reduction of up to 1,200 locations. Going private will ease quarterly reporting pressures, but introduces another set of incentives focused on value extraction.
Boots is also under pressure. Employees are bracing for job cuts and store closures as its parent company realigns its capital structure. While Walgreens has not confirmed plans to spin off or reposition Boots, analysts and employees are preparing for changes that may follow the transaction.
Joann, Hudson’s Bay, and At Home: Recent Case Studies
Walgreens is joining a wave of retailers that have turned to private ownership for operational breathing room. Joann re-entered public markets in 2021 after being owned by Leonard Green & Partners. Just three years later, it filed for bankruptcy and was reacquired by the same firm in a pre-packaged restructuring deal.
Hudson’s Bay Company was taken private in 2020 by a consortium led by executive chairman Richard Baker. After spinning off Saks.com and attempting to modernize its assets, the company filed for creditor protection in early 2025 and began winding down its Canadian department store business. Its 355-year legacy concluded not with a splashy exit, but a series of concessions to reality.
At Home was acquired by Hellman & Friedman in 2021, riding high on pandemic-era home décor demand. It recently filed for Chapter 11. It cited tariffs and weak consumer spending as drivers of its liquidity crisis, having missed an interest payment in May, then entered forbearance with lenders. Its restructuring support agreement calls for eliminating nearly all of its $2 billion debt and providing $200 million in new capital, with an initial closure of 26 stores by September. Lenders are expected to convert most debt into ownership, while the company remains in operations during restructuring.
These are just a few of examples that reflect the range of outcomes under private ownership. Some firms exit stronger, others stall. A few vanish entirely.
Strategic Implications for the Beauty Category
Boots is a category leader in U.K. mass beauty. Its future will be shaped by how Sycamore chooses to manage its capital, store footprint, and private-label innovation. If Boots sees cuts in investment or loses control of its identity, beauty brands may seek more stable partners. This shift would coincide with Ulta Beauty’s planned entry into the U.K. market, an expansion that may have once seemed audacious but now looks strategically timed.
The reallocation of shelf space, marketing budgets, and store labor has already begun in anticipation. If Boots is forced to compete on thinner margins or under constrained leadership, Ulta may find less resistance than expected.
Pressures on Pharmacy and Health Retail
On the pharmacy side, Walgreens is not alone in navigating structural headwinds. CVS, Walmart, and Amazon have each moved more aggressively into healthcare services, leaving Walgreens to play catch-up in delivery models and in-store care.
Private ownership may allow Walgreens to move faster in modernizing its offerings, but it will also require tighter returns on capital deployed. There will be little room for experimentation. Walgreens is now the largest PE-backed retailer in the United States by store count, making it a closely watched example of whether scale and leverage can coexist with reinvention.
Ownership as Strategy, Not Structure
Walgreens going private may look like a retreat from public failure, but it is also a strategic pivot. Ownership structure increasingly reflects corporate intent. Going private is not the end of scrutiny. It is a shift in who is watching and what they expect.
For a category like beauty, which thrives on consistency and trust, the introduction of leveraged incentives into a foundational retailer creates instability. For pharmacy, the concern is speed. Walgreens has struggled to keep pace and now must do so without the safety net of public equity.
The question isn’t whether private equity can fix Walgreens. It’s whether the conditions that drove it private in the first place will allow for the kind of reinvention retail needs most.
Discussion Questions
What impact would Walgreens going private have on innovation and investment in its beauty and wellness categories?
Can a PE-backed Walgreens still effectively compete with Ulta and Sephora, especially as Ulta expands into the U.K.?
If Sycamore spins off Boots, what type of buyer or investor would be best positioned to grow the brand?
Are PE firms becoming the stewards of last resort for legacy retailers, or can they be agents of transformation?
Poll
Loading …BrainTrust
Dave Wendland
Vice President, Strategic RelationsHamacher Resource Group
Mohamed Amer, PhD
CEO & Strategic Board Advisor, Strategy Doctor
Scott Benedict
Founder & CEO, Benedict Enterprises LLC
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This deal has come about largely because of the poor management of Walgreens, which has seen its enterprise value decline significantly amid mounting pressures on its core business. While the transaction may provide some short-term breathing room, it does not offer a long-term solution – particularly if the resulting debt is simply transferred back onto the company.
The bigger concern lies with Boots. In contrast to Walgreens in the US, Boots is a well-managed, highly trusted retailer, and a deeply embedded part of British high street culture. Saddling it with additional debt would limit its capacity to invest and adapt in an increasingly competitive market – a move that would damage its long-term prospects.
As an aside … the focus on Ulta’s moves in the UK is somewhat misplaced. Ulta is buying Space NK, which operates in the premium part of the market. As such, it has a relatively small overlap with Boots. The bigger concern is the impact from the expansion of Sephora in the UK on the beauty side, and the further incursion of the grocers on the personal care and mass side. Amazon and TikTok are also growing share in beauty. This is why Boots needs to be on the front foot and not weighed down with the burden of heavy debt.
Sycamore’s “successful retail turnarounds,” as touted by Walgreens CEO Tim Wentworth, don’t match reality. The PE firm is more focused on balance sheet restructuring than market-facing innovation. Walgreens is facing general retail headwinds, including falling foot traffic and shorter visit durations, as consumers prioritize service, speed, and innovation, becoming increasingly impatient with friction and inconvenience. These require investments rather than managed decline and cash extraction.
In the immediate future, Walgreens’ core beauty categories, which drive cash flow, will continue to receive investment, while experiential wellness initiatives will be closely scrutinized. Regarding the Boots spin-off opportunity, the ideal buyer will likely be a strategic player in the European beauty ecosystem, such as L’Oréal or Unilever.
The best solution would be for Ulta to buy Boots. However, I think this is a distant possibility.
This debacle makes its way to RetailWire…finally. Thank you Brian!
But if we’re looking for parallels, how about a little closer to home: Rite-Aid. They, too, were a RW favorite for conversation, until the actual news – liquidation – broke, and then were ignored. The similarities with Walgreens are, perhaps, limited, but they are likely to have one thing in common: yes, that old four-letter word…debt. So the answer to how well this goes will inevitably tie to how that is managed. I wish them well, but – even at best – it won’t be easy…even with one fewer major competitor around.
As the tides shift for Walgreens – and across the entire retail sector – I can imagine better shopper experiences, improved financials, and innovation may return. It has been absent too long and consumers are hungry for a renewal.
Positive thoughts are good. But the reality is this is a PE acquisition, and the only winner is Sycamore. The history of PE in retail is a disaster for the retailer and a big win for the investor.
I see a number of store closures in the future for both Walgreens and CVS. Being owned by private equity will only hasten the pace of closures for Walgreens, as an ROI-based assessment of their retail estate portfolio will no doubt result in a more rapid pace of change for the venerable brand. Grocery and Mass Merchants have taken a significant share in this space, as the “1 stop” convenience benefit they provide consumers is compelling, in addition to lower pricing.
In short, this format is overbuilt in the US market, and store closures are needed. It will be very painful, I’m afraid.
PE money can be a shot of green for businesses mired in stagnant growth, debt, or to take the next step in business restructuring. Walgreens would be a good candidate here as PE will have the resources and experts to elevate the company to the next level without the distractions of Wall St. Especially as the pharmacy business is on shakier ground as a previously trusted source of revenue.
But PE money is not without a noticeable cost. Assume there will be cuts in beloved projects, deal-making with new vendor partners, and steeper performance/revenue increases to go along with it all. PE firms often want to execute on a fund for an aggressive 5-year return.
This could lead to a shift in focus, as private ownership often prioritizes long-term growth over short-term profits. It might enable Walgreens to invest more heavily in innovative beauty and wellness products, accelerating R&D and partnerships. However, reduced public scrutiny could also limit transparency and accountability in these efforts.
This will go the same way as previous PE investments in retailers. Sycamore will take its money in fees and interest. Walgreens will be starved for investment. In three years, Sycamore will take it public to solidify its gains.
For Walgreens as an operator, nothing good. For the shopper? Don’t count on any improvements.
Looking at Sycamore’s retail investment list, I see a few successes but a lot of middling about. From direct experience, have not been impressed with how Staples has been managed since the takeover – Office Depot is far more effective per dollar of inventory I’ve committed. Sycamore always wins; the workers, shoppers, and supply chain rarely so.
Sycamore always wins!
Having served on the board of a company that experienced three private equity owners, caution regarding instant turnaround success should be exercised. The good PE firms emphasized developing & funding of a differential strategy. The poor ones only focused on the numbers, attempting to save their way to prosperity. There was no strategy, only capital & operating budget cuts. Walgreens needs to beware.