Title: Walgreens Struggles with Transition to Health Services, Shares Hit a 14-Year Low
Subtitle: CEO Rosalind Brewer’s Departure Complicates Company’s Pivot
Date: [Insert Date]
Walgreens, the well-known pharmacy and retail chain, has been facing challenges as it attempts to shift its focus towards health care services. This transition has resulted in mixed results for the company, and its shares hit a 14-year low on Friday. Walgreens also announced that its profits for this year would likely be at the lower end of its forecasts.
The decision to shift towards the U.S. health care sector comes at a time when the company is consolidating its efforts. However, industry experts have questioned the wisdom of this move, pointing out that health care is not CEO Rosalind Brewer’s area of expertise. Prior to joining Walgreens, Brewer held executive positions at Starbucks and Walmart’s Sam’s Club division.
Under Brewer’s leadership, the company has been working on opening more doctors’ offices inside Walgreens stores. Additionally, Brewer oversaw the complex rollout of the Covid-19 vaccine at Walgreens pharmacies and enforced pandemic safety standards within the stores. In a statement, Brewer expressed her pride in her accomplishments and stated that the company was on track to become a leading consumer-centric health care company.
However, Brewer’s departure comes at a challenging time for Walgreens. Just over a month ago, the company’s chief financial officer, James Kehoe, also left to join a technology firm. As Walgreens leans further into the health care business, it faces significant hurdles including managing pharmacy reimbursements, transforming its business model to focus on primary care, and dealing with opioid liability issues.
The departure of both the CEO and CFO within such a short span has raised concerns among analysts. Deutsche Bank’s analysts noted that it was possibly the worst time for such executive departures, as they could indicate underlying issues within the company. The search for a permanent successor to Brewer is currently underway.
In the interim, Walgreens has appointed Stefano Pessina, the company’s executive chairman, as the interim CEO. However, it is worth noting that the appointment of Brewer’s successor presents an opportunity to address gender diversity at the executive level. Female representation in top leadership positions in the retail industry has declined recently. According to Heidrick & Struggles, only 13 out of 86 retail companies in the Fortune 1000 had female CEOs as of July.
Considering this trend, the departure of Brewer means that only one Black woman, Thasunda Duckett at TIAA, remains as a Fortune 500 company’s CEO.
Walgreens now faces the challenge of finding a new leader who can effectively navigate the company’s pivot to health care services and address the pressing issues it currently faces. Investors will be closely watching for updates on the selection process and the strategic direction the company intends to pursue under new leadership.
As the company’s shares continue to decline, the need for a strong and experienced CEO to lead Walgreens through this transition becomes increasingly vital.