Dive Brief:
- Walgreens-backed VillageMD will exit its home market in Illinois on April 19, a company spokesperson confirmed to Healthcare Dive on Thursday.
- The primary care provider currently has six locations in the state, all in the Chicago area, according to VillageMD’s website. One location, in Elk Grove, Illinois, just opened in August.
- Last week, Walgreens confirmed it would close its remaining VillageMD locations in Florida, which was previously one of the chain’s larger markets.
Dive Insight:
Walgreens is shutting down dozens of clinics as it works to trim expenses and speed its healthcare unit’s drive toward profitability.
In the fall, the Deerfield, Illinois-based retail and pharmacy giant said it planned to close 60 underperforming VillageMD clinics this year. Walgreens executives reported the chain was about halfway through the planned closures during an earnings call in early January.
Chicago-based VillageMD is part of Walgreens’ U.S. Healthcare unit, which also includes businesses like at-home care provider CareCentrix and specialty pharmacy Shields Health Solutions. The segment is a key strategic priority for the retailer as it builds on its pharmacy roots to offer healthcare services.
Though the unit’s revenue has grown, it reported a $96 million adjusted operating loss in its first quarter. Walgreens has also conducted multiple rounds of layoffs and closed stores in the U.S. and the U.K.
“I fully acknowledge the structural headwinds in our core pharmacy business and the growing pains in our healthcare segment,” Tim Wentworth, a former Cigna executive who took on the Walgreens CEO role last year, said on a January call with investors.
The retailer has also made several changes to its executive leadership team. In early February, Walgreens named a new leader for its U.S. Healthcare unit as well as a permanent chief financial officer and a new chief human resources officer.
