Walgreens To Tap Starbucks COO As New Chief Executive

Walgreens Boots Alliance has hired Starbucks Corp. operating chief Rosalind Brewer as its next chief executive, according to sources close to the company.

Brewer will replace Stefano Pessina as the global drugstore chain’s top executive. Walgreens Tuesday evening wouldn’t confirm Brewer as the choice but sources elsewhere in the company said an announcement was imminent and several reports said she would be leaving Starbucks by March.

Pessina, who is 79 years old, announced his plans to step down as CEO in July but will retain his title as executive chairman. Pessina, who is also Walgreens largest individual shareholder, was key to the selection of Brewer, a highly respected executive and hailed for turning around Starbucks by introducing new drinks and other products while upgrading the chain’s use of technology.

It was unclear when Brewer planned to takeover as CEO of Walgreens, which is the largest drugstore chain in the U.S. with more than 9,000 drugstores in all 50 U.S. states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands.

Starbucks told industry analysts Tuesday that Brewer “was leaving at the end of February for a new role at another public company,” the Wall Street Journal reported.

In tapping Brewer, Walgreens will be getting a seasoned executive with retail experience. Brewer, who was also elevated to the Starbucks board of directors in March 2017, was president and CEO of Sam’s Club prior to her stint at the coffee chain.

Brewer is also unique in the history of Walgreens because she is black and a woman. Walgreens history of CEOs has been white and male.

Nearly 80% of the U.S. population lives within five miles of a Walgreens or Duane Reade pharmacy, which has made Walgreens and rival CVS key players in the distribution of vaccines against Covid-19.

Despite Walgreens key role during the pandemic, Brewer faces many challenges at the drugstore giant, which has been under an intense pressure with flat or falling sales in the U.S. and Europe as more customers buy their prescriptions online and the global Covid-19 pandemic hurts in-person store sales. Last year, there were reports Walgreens was going to engineer a leveraged buyout but there’s been no indication from the company lately that a strategy to take the company private is in the works.

Walgreens has been forging ahead with partnerships and acquisitions to transform the drugstore chain, including a decision last year  to spend $1 billion developing physician-staffed clinics attached to hundreds of its U.S. stores with its partner VillageMD.