<div id="readability-page-1"><div><div><p>It has some revamped stores. It has some snazzy new ranges of beauty products. And perhaps most of all, with the appointment of Alex Baldock, it will soon have an experienced chief executive who knows how to turn around a retail business.</p><p>It is not hard to work out why the City is getting excited about the prospect of Boots returning to the London stock market with a value of £7bn or more.</p><p>There is just one snag, however. British retailing is a very tough business right now, and investor confidence is very fragile. In reality, Boots should focus on improving its performance – and a listing will have to wait.</p><p>With Baldock, Boots will certainly be getting someone who knows how to turn around a massive retailer. As chief executive of Currys, he is credited with rescuing the chain from an accelerating decline.</p></div></div><div><div><p>He cut down the number of stores, trimmed costs, promoted its online operation, and emphasised services, credit and repairs as much as sales. It was hardly rocket science, but it was disciplined, focused and it delivered results.</p><p>The company’s share price more than doubled from its 2024 low, and it was telling that it fell sharply on news of his departure. Currys shareholders will miss him.</p><p>Boots certainly needs someone to press the reset button. Sure, it is one of the most familiar names on the British high street, with a rich heritage stretching back to its Nottingham roots. It has a trusted and familiar brand. But then, of course, so did plenty of other retailers.</p><p>WH Smith’s former high street business, now named TJ Jones, looks finished, while British Home Stores has long since disappeared. Marks &amp; Spencer has managed to claw its way back, and it is doing well again under Stuart Machin, and there are some signs that John Lewis, under Jason Tarry, its chairman, is starting to recover.</p><p>But the great names that stood alongside Boots in its heyday have mostly faded away.</p></div></div><div><div><p>It doesn’t help that Boots has been through a whole series of different owners. It merged with Alliance Unichem in 2006, before being bought out by KKR in 2007, then sold to Walgreens, a US company, which last year was sold to another private equity firm, Sycamore Partners.</p><p>It has been a confusing journey, and in many ways it is remarkable that the chain has survived at all.</p><p>Even so, there is no point in denying that it has suffered. The stores have been starved of investment, there has been little in the way of long-term planning, and it has been hard for any of its chief executives to leave their mark on the chain.</p><p>It has returned to profitability, but Baldock will face a substantial challenge to get it growing as fast as it should do.</p><p>The assumption in the City is that Baldock has been drafted to knock the retailer into shape, spruce up the results, figure out a growth story and then lead a stock market float sometime in 2027 or 2028. Its new owners can cash their investment, and the business can be returned to British ownership under revitalised leadership.</p><p>The trouble is, it is going to be very hard to list this company at any time in the next two or three years. There are four big obstacles in its way.</p><p>To start with, there is a war against Iran that might flare up again, along with the looming threat of oil shortages. Sure, tech valuations in New York keep hitting record highs, but Boots doesn’t fall into that category.</p></div></div><div><div><p>Next, Britain is about to lurch to the Left, with a new prime minister and possibly a new chancellor as well.</p><p>We have already imposed more and more taxes on retailers, with an increase in National Insurance for employers, higher business rates, a packaging levy, on top of one of the highest minimum wages in the world and extra green levies on electricity.</p><p>If by some miracle a company manages to make any money after paying all those, Labour backbenchers would start demanding a “windfall” tax as well. The UK has become a very, very tough place to make any money.</p><p>Thirdly, the London stock market is steadily dying. There is a constant flow of companies leaving the market – with a takeover offer last week, Tate &amp; Lyle looks like it will be the latest addition to the list – but virtually none to replace them.</p><p>London has slipped to only the eighth largest market in the world, behind Taiwan and South Korea. It has turned into a backwater, and it is hard to get global investors very interested in it. They prefer to put their money somewhere where it can grow a lot faster.</p><p>And of course on top of all that, traditional retailing remains an industry in structural decline, especially as it still faces intense competition from the internet.</p><p>At a time when investors are excited about AI, space and emerging markets, it is going to be hard to persuade them that what they really need to do is put their cash into shops selling prescription glasses and vitamin pills in Doncaster, South Yorkshire, or Cheltenham, Gloucestershire.</p><p>They might like the dividend if it is set high enough. But it is not going to quicken anyone’s pulse.</p><p>The blunt truth is this. Baldock is clearly a smart retailer. Boots is lucky to have a chief executive who can drive the business forward. And yet an IPO at this stage is going to prove very hard.</p><p>It would consume significant amounts of management time. The temptation would be to flatter the results by squeezing out profits when it should be investing for the long term.</p><p>And it won’t even get full value, given how depressed the London market is right now.</p><p>Boots should focus on rebuilding the brand – a return to the stock market is just a distraction right now.</p></div></div></div>

<p>Boots faces significant challenges in attracting investors for a potential £7bn stock market return. Despite new leadership under Alex Baldock, who previously revitalized Currys, the British retail environment is tough, with fragile investor confidence. Obstacles include economic instability, increased taxes, a declining London stock market, and the structural decline of traditional retail. While Boots has returned to profitability, it must focus on growth before considering a listing, which may not happen until 2027 or 2028.</p>

The telegraph

Boots will prove a very tough sell to investors