The company says it is introducing new products, creating a better environment for customers, and developing its wellbeing services.

It says 300 stores will be refurbished this year as part of a rolling four-year programme.

The company has come under pressure from rivals, particularly the supermarkets, and it is hoping the changes will attract more customers.

New format

The chief executive Steve Russell said: "The immediate priority is for Boots stores to drive sales growth by upgrading the environment, creating more of our own brands and raising levels of customer service."

Boots has been testing the new store formats in the Swindon and Oxford area and the company said it had been encouraged sufficiently to go ahead with the scheme.

More than half of the stores being revamped this year are in London.

Changes are likely to include better cosmetics areas and new shop fronts.

Loss-making ventures

Boots made pre-tax profits of £638.7m in the year to March 2002, an increase of 9.9% compared with the previous year.

The company said its decision to demerge or possibly sell car accessory chain Halfords reinforced the group's focus on health and beauty.

During the year Boots suspended its loss making ventures the wellbeing channel and bootsphoto.com.