Retail veteran Rosalind Brewer Walgreens is out as Walgreens CEO after more than two years in the job. Walgreens Boots Alliance said Friday that Rosalind Brewer had stepped down as the company’s chief executive. Rosalind Brewer leaves Walgreens as it leans deeper into its strategy to become a health-care company instead of a drugstore.
CEO Rosalind Brewer’s departure from Walgreens CEO is just at a time when the company seeks chief with deep health-care experience. Walgreens’ stock has struggled this year as demand for Covid vaccines has fallen and retail sales have slowed. Walgreens wants a change in its CEO and wants the next one to have “deep health care experience.”
Rosalind Brewer leaves Walgreens
Rosalind Brewer also left the Walgreens company board, effective Thursday. The decision was mutual.
Shares of Walgreens fell about 7% Friday.
Ginger Graham, the lead independent director and a health-care industry veteran, will work as interim chief while the company searches for a successor. Graham is a veteran of the health-care industry.
Rosalind Brewer has agreed to continue advising Walgreens until it selects a permanent CEO. She didn’t immediately return requests for comment.
“Our Board and leadership team will intensify our focus on creating value for our customers and our shareholders while we advance the search for a successor with deep healthcare experience to lead in today’s dynamic environment,” said Stefano Pessina, Walgreens’ executive chairman.
What lead to CEO Rosalind Brewer’s departure?
Rosalind Brewer and Walgreens were in a rough patch leading up to Friday’s announcement. Walgreens shares are down more than 32% this year as of Thursday’s close, as the company has struggled with a drop in demand for Covid testing and vaccines. It’s also seen front-end retail sales for items like toothpaste and shampoo consistently fall as consumers go to competitors like Walmart and Amazon for those everyday necessities.
In June, the company reported fiscal third-quarter earnings that missed Wall Street expectations for the first time since July 2020. It also slashed its profit guidance for the year.
Walgreens CEO change a strategic move
As Covid cases are back on the rise, and could prove to be a boon for pharmacy sales. For consumers who may not be interested in another Covid booster, they could still turn to Walgreens for its typical over-the-counter cold and flu products. During its fiscal first quarter ended Nov. 30, an early cold and flu season boosted demand for cough and cold medicine and helped Walgreens offset its losses from a slowdown in vaccine demand.
A veteran of Walmart and Starbucks, Rosalind Brewer had led Walgreens since March 2021. During her brief tenure, the company had pursued a transition that would position Walgreens more as a health-care company than a pharmacy chain.
Walgreens transitioning into a health-care provider
Walgreens recently acquired Summit Health and primary care provider VillageMD, which has opened hundreds of clinics, including some that are adjacent to Walgreens stores.
It also struck a deal with CareCentrix, which coordinates home care for patients after they’re discharged from the hospital, and Shields Health Solutions, a specialty pharmacy company.
Yet as Walgreens leans deeper into its aspirations to become a health care provider and away from its identity as a drugstore chain, Rosalind Brewer leaves Walgreens as her skill set wasn’t as aligned with the company’s goals. “The retail side of the business, where Ms. Brewer has much more experience, is simply not an area that Walgreens wants to pursue as a major growth opportunity,” retail analyst and GlobalData managing director Neil Saunders said in an emailed statement.
Rosalind Brewer on leaving Walgreens
“I am confident that WBA is on track to be a leading consumer-centric healthcare company, serving thousands of communities across the country, especially those that need access to healthcare the most,” Brewer said in Friday’s announcement.
Pessina thanked Brewer for her high-stakes work during the Covid pandemic. “She furthered our consumer facing capabilities while supporting the culture of community and team-member engagement in difficult times,” said Pessina.
Brewer led the team that created Walgreens’ vaccine scheduling system and developed a plan to drive vaccine equity, the company said.
Despite Brewer’s many accomplishments, Pessina called Graham “the ideal person” to serve as the company’s interim CEO, considering her leadership experience across multiple segments of the health-care industry.
