Walgreens Boots Alliance CEO Rosalind Brewer steps down

Rosalind Brewer has exited the CEO post at Walgreens Boots Alliance (WBA), the parent of U.S. drug store giant Walgreens, after nearly two-and-a-half years in the role.

WBA said Friday the company and Brewer “mutually agreed” that she would relinquish the position, as well as her seat on the board of directors, effective Aug. 31. Ginger Graham, lead independent director at WBA, has been named interim CEO.

Plans call for Brewer to remain with WBA as an adviser as the Deerfield, Illinois-based pharmacy, health and beauty retailer conducts a search for a permanent CEO.

“I am grateful to have had the opportunity to lead Walgreens Boots Alliance and to work alongside such talented and dedicated colleagues. I am proud of what we accomplished together. We’ve improved the lives of our employees, expanded health care services for our customers and enhanced our ability to deliver on our purpose of ‘more joyful lives through better health,’” Brewer said in a statement.

“Over the past several years, we have recruited a world-class team to WBA, including the first-ever chief customer officer and the first-ever president of U.S. health care, and invested deeply in the improvement of the company’s overall culture,” she explained. “I am confident that WBA is on track to be a leading consumer-centric health care company, serving thousands of communities across the country, especially those that need access to health care the most. I look forward to watching the company continue its transformation to deliver localized health care.”

Related:Walgreens to acquire 120 Brookshire Grocery pharmacies

Rosalind Brewer, CEO of WBA, left the post on Aug. 31. / Photo courtesy of Walgreens Boots Alliance.

A star retail executive, Brewer started as WBA’s CEO on March 15, 2021, succeeding Stefano Pessina, who became executive chairman of WBA. She came to WBA after serving as group president and chief operating officer at Starbucks since joining the company in October 2017. Brewer joined the cafe chain after more than five years as president and CEO of Sam’s Club, where she became the first woman and African-American to lead a Walmart division and replaced Brian Cornell, currently chairman and CEO of Target Corp.

Brewer had joined Walmart in 2006 as regional vice president and later was promoted to president of Walmart East. Before coming to the retail giant, she spent 22 years at Kimberly-Clark. She also is a former director of Amazon, Lockheed Martin and Molson Coors Brewing Co.

WBA noted that Brewer started as its CEO when COVID-19 vaccinations began rolling out in the United States and she created and led a team to devise the technology for a vaccine scheduling system, a safe operating model for store labor and a plan to drive vaccine equity. To date, WBA has administered 70 million-plus shots of the COVID vaccine. In October 2021, Brewer and her executive team pivoted WBA’s strategic focus more toward health care, including three acquisitions to spur the company’s deeper dive into consumer-centric care.

Related:Walgreens to close 150 stores over the next year

“On behalf of the entire board, I would like to thank Roz for her contributions to WBA,” Pessina stated. “Roz navigated the company through the global pandemic, overseeing the critical rollout of vaccines in Walgreens pharmacies and to high-risk populations across the country. She furthered our consumer-facing capabilities while supporting the culture of community and team-member engagement in difficult times. We appreciate her hard work and commitment to the company during this period of unprecedented change.”

Pessina also cited Graham’s health care background as she assumes the interim chief executive role.

“Ginger is the ideal person to serve as interim CEO, given her leadership experience across multiple segments of the health care industry, deep knowledge of WBA and strong operational skills,” he commented. “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.”

Related:Walgreens Boots Alliance global CFO James Kehoe to depart

Graham has served on the WBA board since 2010, including a stint as lead independent director, and has nearly three decades of leadership experience in the health care sector. Her past roles have included serving as president and CEO of pharmaceutical manufacturer Amylin Pharmaceuticals and as group chairman and president at cardiology medical technology firm Guidant Corp. She began her career at drugmaker Eli Lilly and Co.

WBA fine-tunes strategy and operations

Brewer departs as WBA recently noted difficulties in improving profitability at its U.S. Healthcare business, which the company cited in reporting disappointing earnings results for its fiscal 2023 third quarter. That led the company to “rightsize” its cost structure by raising its cost management program target from $3.5 billion to $4.1 billion in overall savings through fiscal 2024, as well as initiating plans to shut another 150 U.S. stores—and 300 locations in the United Kingdom—by the close of fiscal 2024 next August.

WBA, too, recently completed an organizational restructuring, including a transformation of its headquarters that led to the elimination of over 500 roles, or roughly 10% of its corporate and U.S. support office workforce. In August 2019, the retailer had unveiled plans to close 200 drug stores, or about 3% of its U.S. footprint.

In addition, WBA has experienced some key executive changes. Earlier this month, James Kehoe, global chief financial officer, left the company to become CFO at financial services technology firm FIS. Manmohan Mahajan, senior vice president and global controller, was named as interim global CFO while WBA seeks a full-time replacement. And in September 2022, WBA announced that Walgreens President John Standley would leave the company that November as part of a U.S. retail business reorg that split leadership between Lee Cooper as president of pharmacy and Tracey Brown as president of Walgreens retail and chief customer officer, a newly created position.

“Walgreens is now operating without both a permanent CEO and CFO, while simultaneously managing multiple acquisitions including VillageMD and SummitHealth CityMD. We think Walgreens’ strategic pivot toward [health care] provider assets was a step in the right direction but created substantial execution risk, given the complexities and idiosyncrasies of managing local provider networks and partnering with health plans,” Bank of America Securities analyst Allen Lutz said in a research note on Friday.

“The biggest question moving forward will be understanding how a new management team will position the company given all of the recent changes—something that is unknowable today,” Lutz explained. “One potential positive could be the lens through which a new management team views Walgreens’ current assets. In the near-term, questions on the near-term trajectory of the business are likely to outweigh all other factors.”

This year, rival drug chain Rite Aid also saw a leadership change at the top. In January, the Philadelphia-based company announced the departure of CEO Heyward Donigan and named board director Elizabeth “Busy” Burr as interim CEO during a search for a permanent CEO. The move marked Rite Aid’s second CEO change in less than four years. Donigan had served as Rite Aid’s CEO since August 2019, when she succeeded Standley, who left the company after holding the CEO spot since June 2010.

*Editor's Note: Article updated with analyst comment.