Jacksonville, Florida – Village Medical recently said that it would be closing its ten clinics inside of Jacksonville area Walgreens shops. This ends an endeavor that started only two years ago. Walgreens Boots Alliance Inc. plans to close about 9% of their VillageMD offices and spend $600 million less on capital projects next year. This move is part of that plan. The goal of this choice is to improve the company’s financial condition in general.
On October 12, the healthcare website HCInnovationgroup.com said that the closings were part of a bigger plan by Walgreens Boots Alliance. During a conference call for the fourth quarter, Walgreens’ executive vice president and head of U.S. Healthcare, John Driscoll, told stock analysts that about 60 clinics in five VillageMD markets would close by the summer of next year. VillageMD is a big name in the healthcare industry and has about 680 locations in 26 cities.
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Driscoll stressed that the company’s long-term goal is to build up density in areas that have a lot of potential for future profit growth and where they can best serve patients with a unified asset base. Not only did he not say which markets would be closed, but Village Medical has confirmed that this move affects all ten locations in the Jacksonville area.
“As we grow, we are constantly evaluating our footprint. With that, we plan to exit approximately five markets and approximately 60 clinics in fiscal 2024,” Driscoll said on the call, according to a transcript that Seeking Alpha posted. He said that the exits could happen in a number of ways, such as through sales or hybrid equity deals.
Cutting down on the number of Village Medical clinics comes just one day after Walgreens Boots, based in Illinois, stated that Tim Wentworth would be taking over as CEO from Roz Brewer. Brewer was in charge for less than three years, and one of his main goals was to build a health care services organization. Walgreens Boots spent billions of dollars building a portfolio of health programs and care offices like VillageMD. The company wants to connect these services with Walgreens’ pharmacies, health plans, and pharmaceutical companies.
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But the company lost more money than they thought they would because the costs of opening new VillageMD sites and other projects went over budget.
105 Julington Plaza Drive in St. Johns County was the site of the first Village Medical office in the Jacksonville area. It opened in February 2022. There were also clinics on Dunn Avenue in North Jacksonville, San Jose Boulevard in Mandarin, University Boulevard W. in Lakewood, and Southside Boulevard in Baymeadows/Deerwood, as well as Merrill Road in Arlington, Cassat Avenue, and 103rd Street in West Jacksonville.
Walgreens spent a lot of money on each of these clinics—about $625,000 for each one, for a total of at least $6.25 million. Each of these clinics took up about 3,000 square feet of space in the Walgreens stores and had eight exam rooms. The remaining area, or about 11,000 square feet, was used for retail pharmacy sales. The construction of these clinics began in 2021.
At first, these clinics were part of Walgreens’ big plan to open more than 600 Village Medical centers by 2025 and another 400 by 2027. But recent events have changed this course of development, indicating a strategic recalibration in response to the realities of the market and finances.