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Last Updated: Tuesday, 14 September, 2004, 08:49 GMT 09:49 UK
Boots cuts back health services
Boots store
Boots is being challenged by supermarket chains
Boots has announced plans to quit the laser eye, dentistry, chiropody, and laser hair removal businesses after failing to make "acceptable returns".

A total of 850 staff employed in these sectors now face an uncertain future although Boots said it would "re-deploy as many people as possible".

It will cost 55m to exit the services, but Boots will be keeping its opticians.

The firm has recently been targeted by supermarket chains hoping to take away traditional Boots custom.

Following the announcement shares in Boots Group were up slightly, just over 1%, in London trade.

Patient pledges

The services being shut down were set up in 1999 and 2000, and Boots said that the closures would improve future profits.

Boots Opticians will now be managed as part of Boots The Chemists.

Despite improvements in productivity there is no prospect of the businesses making acceptable returns for the group going forward
Statement from Boots

The axed businesses take up 15,000 square metres in Boots' stores, and it hopes to convert most of the space to retail trading by 2006.

Boots said it would have a better idea in October, when interim results were released, about how many jobs may be lost.

There are 54 Boots dental practices, and the majority will be closed by the end of 2004, although the company pledged to fulfil commitments to existing patients during that time.

Similarly, it is expected to close the nine laser eye surgeries by the end of the year, with those already undergoing treatment having it continued.

No date has been fixed for the closure of the 52 chiropody and 14 laser hair businesses, but "alternative arrangements" will be made for patients.

Supermarket squeeze

In the last financial year, the dentistry, chiropody and laser hair removal businesses made losses of 16.3m, with a deficit of 3.8m for laser eye correction work.

"Despite improvements in productivity there is no prospect of the businesses making acceptable returns for the group going forward," the company said in a statement explaining its closure move.

In July, Boots said first-quarter sales at its chemist stores - which account for about 85% of Boots' profits - grew 5.4%, or 4.4% on a like-for-like basis.

At the same time it announced price cuts and extended opening hours to counter competition from supermarkets over toiletries and pharmaceutical products.

Back in January the firm said it would be axing 900 jobs at its head office in Nottingham in an attempt to cut costs, as part of a programme called Getting Into Shape.

It aims to make 100m worth of savings by early 2007 through the programme.

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