Boots concedes defeat and sells Dutch outlets

Boots, the high street health and beauty chain, yesterday pulled the plug on its loss-making Dutch retail business, in effect abandoning its plans to roll out its UK format across Europe.

Boots, the high street health and beauty chain, yesterday pulled the plug on its loss-making Dutch retail business, in effect abandoning its plans to roll out its UK format across Europe.

David Thompson, Boots' deputy chief executive, said: "It has become increasingly clear ... that our combined health and beauty retail format including pharmacy, does not fit with the characteristics of the Dutch consumer market and cannot become a template for other European markets."

To cut its losses, which are thought to have amounted to about £10m last year, Boots has agreed to sell its 17 Dutch stores to Royal Ahold, the supermarket giant, with which it has also established a distribution pact.

The UK retailer will sell its top toiletries and cosmetics brands through Ahold's 412 Etos shops. Boots will make a one-off payment of £1m to cover outstanding costs and will write off assets worth about £14m.

One retail analyst said: "I think [Boots' withdrawal from the Netherlands] is pretty serious in the sense that shuts the door for them in Europe.... Doing a bit of wholesaling is neither here nor there really."

Boots went into the Netherlands four years ago and hoped to use its presence there as a springboard to expand in countries such as France, Germany, Spain and Belgium. But it failed to establish a meaningful presence in the Dutch market, citing a lack of available properties. Meanwhile, the failure of other European governments to drop restrictive legislation surrounding the management of pharmacies has led to a full-scale retreat from the Continent.

Boots said the decision to pull out of the Netherlands would not affect the group's operations in Asia. Boots shares closed up 2p at 499p.