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DEERFIELD, IL-Walgreens may have cut back on overall store growth, but it will be dramatically remaking its existing stores over the next 18 months, executives said at the company’s second quarter conference call.

In the first half of the fiscal year, Walgreens opened or acquired 269 stores, compared with 282 in the year-ago period, with a net gain of 235 stores after relocations and closings. It will introduce its customer-centric retailing project (CCR) format, which streamlines assortments and devotes more space to skincare and cosmetics, in 35 existing stores by summer, with an eye to rolling it out chainwide.

“After analyzing this initial effort and confirming its success, we plan to fully convert several hundred stores to CCR before Halloween. Then, after holding for the holiday sales period, and making any needed adjustments, we plan to roll out CCR formats at the beginning of calendar 2010,” said Walgreens President and CEO Gregory D. Wasson. “Over the next 18 months, our goal is to touch every store in the chain.”

The company has continued to focus on cost cutting. Its “power” pharmacy, which centralizes the administrative tasks involved in filling prescriptions, has been implemented in 400 of the company’s 780 stores in Florida. By increasing capacity, Walgreens can slow new store expansion, said Wade Miquelon, CFO.

Second quarter sales were a record $16.5 billion, up 7% from the prior-year quarter. Comparable-store sales rose 1.3%. Net earnings were $640 million, compared with $686 million in the same quarter a year ago, which included one extra day because of leap year.

Walgreens operates nearly 7,400 drugstores, work site health centers and home care facilities.

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