Good morning. Today we're talking about Boots’ change in ownership, Poundland’s uncertain future and Eurostar’s new rival.

Big Stories

Boots buyout

The British pharmacy chain, Boots, faces an uncertain future as its parent company, Walgreens Boots Alliance (WBA), agreed to a $10bn takeover by US private equity firm Sycamore Partners. The deal, expected to complete by the end of 2025, marks a dramatic decline in WBA's value, plummeting from over $90bn a decade ago. Sycamore Partners, known for its retail restructuring expertise, is anticipated to focus primarily on Walgreens' US operations, leaving the fate of Boots and other non-core assets ambiguous. This raises concerns for Boots' nearly 2,000 UK stores and its 50,000 employees, particularly following WBA's recent cost-cutting measures, which included the closure of over 300 UK locations. Boots, which dates back to 1849, has struggled to adapt to changing consumer habits, with increased reliance on online retailers and discounters. The company has also faced challenges from lower drug reimbursement rates and economic pressures. While Sycamore has pledged to maintain WBA's brands, the long-term strategy for Boots remains unclear, with potential for a spin-off or sale.

Poundland on the block

Poundland's parent company, Pepco Group, announced it is considering a sale of the UK discount chain, citing an "increasingly challenging retail landscape". The move comes as Poundland grapples with declining sales and rising operational costs, exacerbated by upcoming tax changes. Pepco, listed in London but headquartered in Poland, revealed that Poundland has become a "drag" on the group's overall financial performance, with lower profits and growth compared to its other European clothing stores. The company highlighted the impact of increased employer National Insurance contributions, set to begin in April, which will further strain Poundland's cost structure. Despite recent efforts to revitalise the brand by increasing the number of £1 or less items, Poundland has struggled to compete with rivals like B&M. The chain, which operates 825 UK stores, experienced a sales decline in January and February. The potential sale reflects the broader pressures facing UK retailers, with many warning of shop closures and job losses due to rising costs. While the government defends its fiscal policies, Pepco argues that the current retail environment is "intensifying," prompting its strategic review.

Virgin's Eurostar bid

Virgin Group is aiming to disrupt the cross-Channel rail market, seeking £700m to launch high-speed services competing directly with Eurostar. The company, which previously operated UK rail routes between 1997-2019, plans to connect London with Paris, Brussels, and potentially Amsterdam, offering a high-frequency service by the end of the decade. This ambitious move would make Virgin the first direct competitor to Eurostar, which has held a 30-year monopoly on cross-Channel rail travel. Virgin aims to be a "cornerstone" investor, attracting partners to fund the venture, arguing that the route is "ripe for change" and would benefit from competition. However, Virgin faces challenges, including a dispute over access to an east London depot, a crucial maintenance facility currently used exclusively by Eurostar. Spanish rail company Evolyn also plans to launch a similar service, highlighting growing interest in challenging Eurostar's dominance. The UK's Office of Rail and Road is conducting an independent study on depot capacity, a key factor in enabling new entrants to the market. The move comes as industry players seek to capitalise on the liberalisation of the rail network across Europe and the fact that the Channel Tunnel is operating at 45% of its capacity.

Elsewhere...

Vowel movement: Investment firm Abrdn will add the vowels back into its name after dropping them in a rebrand that was widely mocked.

Office bonuses: Deloitte announced that annual bonuses will be linked to office attendance as it became the latest company to shift away from remote working.

Luxury M&A: Prada is in talks to buy the Versace fashion brand from the US investor Capri Holdings for a price that could reportedly reach nearly €1.5bn.

Loop Likes

• How to answer “walk me through your CV” interview question

• A map of the world’s best restaurants

• 22 simple ways to refresh your home, wardrobe and routine

Number of the Day

£1.70

The cost of a first-class stamp from next month. Since 2022, Royal Mail has already hiked the cost of a first-class stamp five times from 85p to £1.65.

Not a subscriber? Sign up for free

Want to reach an audience of UK business leaders, young professionals and 2,200+ other smart, ambitious people? Reply to this email and we'll be in touch.