Boots has performed well in a tough trading environment, with stock prices holding up, according to ...
Boots has performed well in a tough trading environment, with stock prices holding up, according to David Soutar, fund manager for Solus' UK Growth and Equity Income funds. The high street chemist has been facing stiff competition from the likes of Superdrug but confidence in the company's long-term diversification strategy has kept prices buoyant, he said.
'The market has responded well to plans to launch a spin-off chain called Pure Beauty, which will focus on the higher margin businesses of cosmetics and toiletries,' added Soutar.
The recent announcement that Boots will sell pharmaceuticals as well as health and beauty products in a small number of Sainsbury's stores has also been warmly received, he said.
'Boots has had to act to counter the threat from the supermarket chains, who are not afraid to diversify aggressively.
'This is a move that needs to work for them as the competition is not going to go away,' he said. He is neutral on the stock at the moment, feeling it could be a little overvalued following recent rises.
Boots manufactures and sells health and personal care products, via retail pharmacies and stores throughout the world. The group offers a range of
wellbeing services, encompassing dentistry and chiropody, optician services via nearly 300 Boots Optician stores, and retails cycles and car/cycle parts and accessories at over 400 Halford outlets. Boots also manages retail properties.
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