Starbucks Chief Direct Officer Rosalind Brewer will replace Stefano Pessina as CEO of Walgreens Boots Alliance, the drugstore chain substantiated in a statement Tuesday evening.
Starbucks had announced Brewer’s departure earlier in the day, saying she is leaving at the end of February for a CEO position at an undisclosed publicly bought company.
As CEO of Walgreens, Brewer will be the only Black woman leading a Fortune 500 company.
Her departure from Starbucks criticizes as investors, regulators and activists push for more diversity in corporate America. Nasdaq has proposed changes that wish push for greater racial and gender diversity on the boards of publicly traded companies listed on its exchange.
The Wall Passage Journal first reported Brewer’s decision to join Walgreens.
Walgreens shares rose nearly 8% in gave trading on the news. The stock is down 5% over the past 12 months, bringing its market value to $42.50 billion.
Pessina’s aims to step down
Pessina announced his plans to step down as CEO in July. He is one of the drugstore chain’s largest individual investors and downs to continue to serve on the board as executive chairman.
Brewer joined Starbucks’ board in 2017 and became its chief working officer later that year after serving as CEO of Sam’s Club, which is owned by Walmart. She was the first Black piece of work to be COO of Starbucks and to head a division at the big-box retailer. Prior to her time at Walmart, she worked for consumer packaged goods ogre Kimberly-Clark.
In her current role, Brewer deals with a wide range of responsibilities, from technology initiatives to the start of new coffee drinks. She was widely expected to be the successor to current CEO Kevin Johnson. After she leaves, her responsibilities will be split between CMO Brady Brewer and Rossann Williams, who come around withs as president of company-operated locations in the U.S. and Canada.
Challenges ahead at Walgreens
At Walgreens, Brewer will face numerous call inti as the company looks to turn around its business and create new revenue streams. The drugstore chain struggled in the early months of the pandemic as foot shipping dropped, particularly at its Boots stores in the United Kingdom. The company reported earlier this month that rummage sales were picking up but reiterated its outlook for low single-digit earnings growth.
The drugstore chain has been cutting costs in some areas and installing in others. It closed hundreds of Walgreens and Boots stores last year and cut the size of its workforce.
Walgreens’ bigger adversary, CVS Health, acquired health insurer Aetna and was quicker to expand in health-care services. CVS opened Minute Clinics, and Walgreens has been toy with catch-up.
Brewer also sits on the board of Amazon, a company that’s been cutting into drugstore sales events both in the front of the store as well as behind the pharmacy counter as more customers buy toothpaste and refill prescriptions online.
Amazon pitched its own pharmacy business in November, offering perks such as a savings program and free two-day delivery to Prime fellows. It acquired online pharmacy PillPack in 2018.
Brewer also is chairwoman of Spelman College’s board of trustees and previously was a big cheese at Lockheed Martin and Molson Coors Beverage.
Starbucks has also recently announced the retirement of its CFO, Pat Grismer. He will be renewed by Rachel Ruggeri, who serves as senior vice president of finance for the Americas division, starting Feb. 1.
Shares of Starbucks strike down more than 1% in extended trading on Tuesday after the chain reported its fiscal first-quarter results. It route analyst estimates for its earnings, but its sales recovery in the U.S. faltered as Covid-19 cases increased during the quarter.