Walgreens is adding the former leader of rival drugstore chain Rite Aid to its executive team
Walgreens has added the former leader of a rival it once tried to buy, as the drugstore chain works through a COVID sales slump, a major push into primary care and a looming CEO departure.
The company said Monday that former Rite Aid CEO John Standley will join Walgreens Boots Alliance Inc. as president of its U.S. business, effective immediately.
The move comes a month after the drugstore chain announced that CEO Stefano Pessina will step down and become executive chairman once the drugstore chain finds a replacement for him.
Company spokesman Jim Cohn said that search is continuing, and Standley was named president “with a focus on advancing our vision for the Walgreens of the future.”
Walgreens also said last month that it plans to add primary care clinics to as many as 700 of its U.S. stores over the next few years in a major expansion of the care it offers customers.
Company executive Alex Gourlay said at the time that Walgreens had been looking for a way to provide more comprehensive care to its customers, and company leaders were confident that this was the right model for the future.
Drugstore chains like Walgreens and CVS Health Corp. are placing a growing emphasis on managing the health of their customers, as insurers and other parts of the health care system start focusing more on keeping patients healthy instead of treating them once they become sick.
But this shift for drugstores comes as the COVID-19 pandemic keeps customers away from their stores and takes a huge bite out of sales.
Walgreens, which runs more than 18,750 locations internationally, recorded a $1.7 billion loss in the quarter that ended May 31. The company was hurt in particular by a sales drop from its Boots stores in the United Kingdom.
Standley joins Walgreens more than year after Rite Aid named former insurance executive Heyward Donigan to replace him as CEO. Standley had served as CEO of Camp Hill, Pennsylvania-based Rite Aid Corp. since 2010.
The company currently runs 2,458 stores in the United States. It struggled with losses toward the end of Standley’s tenure. Its board had to approve a reverse stock split in early 2019 to lift plummeting share prices and keep the shares on the New York Stock Exchange.
At Walgreens, Standley will report to Gourlay, the company’s co-chief operating officer.
Three years ago, Walgreens ended a takeover bid of Rite Aid after the deal drew resistance from U.S. regulators. Walgreens instead agreed to buy a couple thousand stores from its much smaller competitor.
Shares of Deerfield, Illinois-based Walgreens slipped 65 cents to $38.10 in midday trading Monday. The stock has already shed about a third of its value so far this year.
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