Buyout bolsters Boots brand

“Boots will not change. Boots will remain Boots” was the bullish declaration proudly offered by Stefano Pessina following the £6.5bn sale of almost half the company that owns the high street stalwart to US equivalent Walgreens.

Russell Parsons

Pessina, chief executive of Alliance Boots was responding to a Financial Times reporter’s question about a new corporate brand for the new entity. His meaning, if I could be so bold: “Boots is a cracking brand, that’s why the Americans have paid a small fortune for it so why change?”

Sentiment no doubt echoed by Pessina’s counterpart at Walgreens. What the US company – which will acquire the remaining shares over the next six months – has bought is a 150-year-old brand that is in rude health.

In terms of brand metrics, Boots has few rivals. A quick glance at YouGov BrandIndex data finds the retailer basking in positive perception.

Its Index score – an average of how customers rate the brand in terms of impression, quality, value, reputation and satisfaction – currently stands at 42.5 against a sector average of 14.6.

Within its Nottingham office, it has a research and development centre that is widely seen as one of the sector’s best for producing own label ranges that live beyond their master brands.

No.7 cosmetics, now in its eighth decade, racks up sales that others look at with green eyes.

The injection of capital allows Boots to reach the boundaries of possibilities in the UK, it also allows for the exportation of its own-label brands into previously unchartered waters.

Both parties have other, different motivations. For Alliance Boots’ owner KKR it eases the burden of debt accumulated when it took over in 2007. For Wallgreens, it allows for the overseas expansion investors have been calling for. What both share, however, is an appetite to exploit the opportunities that a great British brand in Boots brings.

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