For more than a century, Walgreens has been there for Americans. There it stood on the corner, ready with antibiotics when the kids were home with strep throat and waiting patiently with the milk you forgot to grab while grocery shopping.
Walgreens has been there for kids ready to spend pocket change on the walk home from school, for tweens trying out drugstore makeup for the first time and for neighbors who underestimated how much Halloween candy they’d need. For Chicagoans, having such a storied institution call our city home has been a point of pride.
But since August, Walgreens Boots Alliance now counts itself as one of thousands of portfolio companies owned by private equity, an industry renowned for its profits-first, people-last approach to business. Already, warning signs are flashing for Walgreens — and the millions of Americans who rely on Walgreens for medicine and more — in the wake of its buyout by private equity firm Sycamore Partners.
What lies ahead for Walgreens in 2026? While we can’t predict the future, the details of the Walgreens acquisition and key elements of Sycamore Partners’ past are troubling.
First and foremost, according to Walgreens’ June 6 proxy statement, Sycamore financed its $18.8 billion leveraged buyout of Walgreens with 70.9% debt — a truly staggering amount, much higher than the average debt level of 41% used by private equity firms to acquire companies last year.
The leveraged buyout model is a key driver of instability at private equity-owned companies: By saddling companies with substantial debt, resources that could otherwise be invested in innovation, workforce development or adapting to market changes are channeled toward servicing this debt, leaving companies vulnerable to financial distress and bankruptcy.
Indeed, private equity-owned companies are overrepresented in the landscape of corporate bankruptcies: We tracked large U.S. corporate bankruptcies in 2024 and found private equity firms played a role in 56% of them.
A brief look at the history of Sycamore Partners’ other past business dealings gives cause to worry about Walgreens’ future.
Since Staples was acquired by Sycamore in 2017, Sycamore has shuttered roughly one-third of its stores and laid off scores of workers. Meanwhile, Sycamore loaded Staples with debt and extracted a $1 billion dividend from the struggling retailer in addition to transferring Staples’ $150 million headquarters to itself. Mike Motz, the CEO who oversaw hundreds of store closures and tens of thousands of layoffs at Staples, has now been chosen to head up Walgreens.
When Sycamore-owned retailer Nine West filed for bankruptcy in 2018, the company’s other creditors accused Sycamore of a scheme to strip the brand for parts and set it up for failure while sinking Nine West with $800 million in debt.
So where does that leave Walgreens? If the pharmacy’s track record under Sycamore ownership is anything to go by, 2026 doesn’t look rosy.
Just weeks ahead of Thanksgiving, Walgreens announced it would be slashing holiday pay for its retail employees in an effort to cut costs.
In October, it was reported that Walgreens fired most of its communications team and would be closing its offices in Downtown Chicago come 2026. That’s not even to mention the $13.33 billion of debt Walgreens is now saddled with.
Many companies would struggle to service such a huge debt load, let alone one that had already been strained for years amid declining reimbursements from pharmacy benefit managers, hundreds of store closures, pharmacy staff burnout, plunging consumer sentiment and skyrocketing health care costs for millions of Americans during an affordability crisis.
The road ahead for Walgreens appears to be a bumpy one. Should Sycamore implement the same strategy it has applied to the other companies it has acquired, workers will continue losing out as jobs are lost and stores are closed; communities and patients will endure reduced access to health care; and a Chicago institution will be humbled.
Jim Baker is executive director of the Private Equity Stakeholder Project, a nonprofit watchdog organization.