Boots is to sell its Nurofen and Strepsils-making business and 300 store sites as the latest step in its turnaround strategy.
The planned disposal of Boots Healthcare International was announced as the company confirmed disappointing high street sales for the first three months of the year and warned toughtrading conditions would continue to hit profits.
Adding detail to a profits warning issued last month, Boots said like-for-like sales in the final quarter of the year fell 0.9 per cent on a year earlier.
It stuck by revised forecasts for Boots the Chemists' profits of £ 470 million in the recently-completed financial year, but warned figures were likely to be lower this year in the wake of reduced consumer spending and higher costs.
Chief executive Richard Baker said: "It is clear that we are now, and will be for the foreseeable future, operating in a much more difficult trading environment in which sales growth will be hard fought for and cost pressures will continue to rise."
The company, which is attempting to restructure its health-and-beauty chain, said it believed the time was right to sell Boots Healthcare International.
It exports products, such as Clearasil, worldwide and has seen profits grow to more than £80 million from £50 million four years ago.
Boots said the over-thecounter medicines market was consolidating and that its future was better placed outside the group.
The sale process is expected to be complete by the end of the financial year with shareholders likely to get a big proportion of the proceeds.
Analyst Iain MacDonald, at brokers Numis, said the sale of BHI was a positive step.
"It's a good business, it has good margins and has been growing strongly. There's not a lot of commercial rationale having the two businesses together.
"From a shareholder point of view, you could say you're going to create more value by splitting them up," he said.
Among other changes, Boots said it would put 300 of its smaller stores on the market in a sale and leaseback programme which it hopes will raise £250 million.
Mr Baker said the 1,400-store company would continue with a restructuring aimed at winning back market share from supermarket rivals, including Tesco and Asda.
Changes to pricing structures and opening hours have been introduced, but Boots has yet to complete an overhaul of its supply chain and computer systems.