Starbucks chief operating officer Rosalind Brewer will replace Stefano Pessina as CEO of the Walgreens Boots Alliance, the drugstore chain confirmed in a statement on Tuesday evening.
Starbucks had announced Brewer’s departure earlier in the day and said she would take up a position as CEO of an undisclosed public company in late February.
As CEO of Walgreens, Brewer will be the only black woman to run a Fortune 500 company.
Her departure from Starbucks comes as investors, regulators and activists push for more diversity in American businesses. Nasdaq has proposed changes that would result in greater racial and gender diversity on the boards of public companies that are listed on its stock exchange.
The Wall Street Journal first reported on Brewer’s decision to join Walgreens.
Walgreens shares rose nearly 8% in advanced trading on the news. The stock is down 5% in the past 12 months, increasing its market value to $ 42.50 billion.
Pessina’s plans to resign
Pessina announced plans to step down as CEO in July. He is one of the largest single investors in the drugstore chain and plans to continue serving as chairman of the board.
Brewer joined Starbucks’ board of directors in 2017 and later that year became its chief operating officer after serving as CEO of Sam’s Club, owned by Walmart. She was the first black woman to be the COO of Starbucks and head a department at the big box retailer. Before joining Walmart, she worked for consumer goods giant Kimberly-Clark.
In her current role, Brewer is involved in a variety of roles from technology initiatives to creating new coffee beverages. It was widely expected that she would succeed current CEO Kevin Johnson. Upon her departure, her duties will be shared between CMO Brady Brewer and Rossann Williams, who will serve as president of company-operated offices in the United States and Canada.
Challenges at Walgreens
At Walgreens, Brewer faces numerous challenges as the company turns its business around and creates new revenue streams. The drugstore chain struggled during the early months of the pandemic as foot traffic decreased, particularly in boat shops in the UK. The company reported earlier this month that sales were picking up but reiterated its prospect for low single-digit earnings growth.
The drugstore chain has cut costs in some areas and invested in others. Hundreds of Walgreens and Boots stores closed and the workforce reduced over the past year.
Walgreens’ larger rival, CVS Health, acquired Aetna health insurance and expanded faster in healthcare. CVS opened Minute Clinics and Walgreens has caught up.
Brewer also sits on the board of directors of Amazon, a company that restricts drugstore sales both in front of and behind the pharmacy counter as more customers buy toothpaste and refill prescriptions online.
Amazon opened its own pharmacy store in November, offering Prime members perks like a savings program and free delivery within two days. It acquired the online pharmacy PillPack in 2018.
Brewer also chairs the Board of Trustees of Spelman College and was previously a director of Lockheed Martin and Molson Coors Beverage.
Starbucks recently announced the resignation of its CFO Pat Grismer. He will be replaced by Rachel Ruggeri, who will serve as Senior Vice President of Finance for the Americas Division from February 1.
Starbucks shares fell more than 1% in expanded trading on Tuesday after the chain released its fiscal first quarter results. It beat analysts’ estimates for its profits, but its US revenue recovery stalled as Covid-19 cases increased in the quarter.