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Walgreens CEO Steps Down

Walgreens has done well in the U.S. during the coronavirus, but Boots has not fared well in the U.K.

Stefano Pessina, the chief executive officer of Walgreens Boots Alliance Inc., has stepped down, Walgreens said on Monday.

The move is “to prepare for the appointment of a new chief executive officer to drive further progress on [Walgreens’] key strategic priorities and to transform the business for the future to address the rapidly changing health-care sector,” the company said in a statement.

The Walgreens board will begin searching for a new ceo. In the meantime, Pessina will become executive chairman. James Skinner, the current executive chairman, will move out of that position but remain on the board.

Pessina has been heading the business since the merger of Walgreens and Alliance Boots in 2014. In a statement, Walgreens credited him with modernizing the business and completing several strategic partnerships and acquisitions. Under his leadership, many Walgreens beauty sections went through a major makeover in the U.S. and the group also invested in Birchbox, which has a handful of shop-in-shops inside Walgreens stores.

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“As the health-care industry and consumer behavior continue to advance quickly, we look forward to a new ceo joining the team with deep expertise and skill set to drive future success as we move into a new chapter of our company’s very long and proud history,” said Skinner in a statement.

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The news of Pessina’s exit comes a few weeks after the company reported quarterly earnings, which were majorly impacted by the coronavirus, especially in the U.K. For the quarter, sales increased 0.1 percent because of U.S. retail pharmacy operations, with a net loss of $1.7 billion.

Neil Saunders, managing director of GlobalData Retail, noted that COVID-19 impacts were uneven for Walgreens, with U.S. shoppers stocking up on medicines and other essentials, while international shoppers “shunned beauty and other non essential products [that] make up a higher proportion of the sales mix.”

“The performance of Boots during this crisis has been particularly worrisome,” Saunders continued, “And is only partly explained by store closures as most of the U.K. chain remained open during the lockdown.” Boots stores need investment, Saunders said, especially as they face increasing competition for specialty and beauty stores.

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