Village Medical announced it will close its 10 Walgreens clinics in the Jacksonville area on Jan. 5, about two years after opening the first of them.
Healthcare Innovation at HCInnovationgroup.com industry information site reported Oct. 12 that Walgreens Boots Alliance Inc. executives will close about 9% of their VillageMD clinics and trim $600 million in capital spending in the coming year as part of broader plan to improve its financial performance.
Village Medical at Walgreens offers primary care along with pharmacy services.
John Driscoll, Walgreens Boots Alliance executive vice president and president of U.S. Healthcare, told stock analysts in a fourth-quarter conference call Oct. 12 that his team will close about 60 clinics in five VillageMD markets by next summer.
VillageMD has about 680 locations in 26 cities.
“Our long-term focus will be on achieving density in those regions with the greatest potential to drive future profitability growth and where we can best serve patients with our consolidated set of assets,” Driscoll said.
Driscoll did not say which markets were closing, but Village Medical has announced Jacksonville’s 10 area locations as one of them.
“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 in the analysts’ call according to a transcript posted by Seeking Alpha.
‘’These exits may take a variety of forms, including outright sales and hybrid equity arrangements as examples. As we exit these non-strategic markets, our long-term focus will be on achieving density and those regions with the greatest potential to drive future profitability growth and where we can best serve patients with our consolidated set of assets.”
The Healthcare Innovation site reported that details of the spending cuts came a day after Illinois-based Walgreens Boots announced it hired Tim Wentworth as its next CEO.
He takes the position after Roz Brewer left the company less than three years into her tenure.
The site said that building a health care services organization was one of Brewer’s main strategies and Walgreens Boots has spent billions to build a portfolio that includes care clinics VillageMD and other health programs.
The goal was to connect those services and others with consumers already using Walgreens’ pharmacies or with the company’s health plan and pharmaceutical partners.
However, losses were steeper than expected as spending on new VillageMD locations and another initiative ballooned.
Walgreens and Village MD opened the first Village Medical clinic in the area in February 2022 at 105 Julington Plaza Drive in St. Johns County.
The others are at 7224 Merrill Road in Arlington; 654 Cassat Ave. and 7546 103rd St. in West Jacksonville; 866 Dunn Ave. in North Jacksonville; 12145 San Jose Blvd. in Mandarin; 3505 University Blvd. W. in Lakewood; and 8309 Southside Blvd. in Baymeadows/Deerwood; 11430 Beach Blvd. in Beachwood; and 14405 Beach Blvd. in San Pablo.
Walgreens built-out the 10 clinics at a cost of about $625,000 each, representing a cost of at least $6.25 million.
All are designed with eight exam rooms and were built-out within the Walgreens stores.
The clinics took about 3,000 square feet, leaving the remainder of the stores – about 11,000 square feet – for the retail pharmacy sales.
Construction began in 2021.
The clinics were part of Walgreens’ effort to open 600 or more Village Medical centers by 2025 and another 400 by 2027.