John Standley, the veteran retail deal-maker and former CEO of Rite Aid Corp., has been appointed president of Walgreens Boots Alliance in a move that could ignite speculation of a deepening partnership with The Kroger Co.
Standley, whose appointment is effective immediately, will lead all operations of the Walgreens drug chain and will have responsibility for the development, growth and management of the business as the company continues to build on its leadership in the rapidly evolving healthcare sector, said the international retailer, which has U.S. headquarters in Deerfield, Ill. Standley will report to Alex Gourlay, co-chief operating officer, who had been serving as Walgreens’ president on an interim basis.
Standley was Rite Aid’s CEO from 2010 until departing last year, helping to engineer several big deals including a sale of more than 2,000 Rite Aid stores to Walgreens, and a proposed $24 billion merger with Albertsons Cos. that would have made him CEO of Albertsons. Albertsons dropped that deal in 2018, however, after Rite Aid shareholders indicated they would not support it. Standley previously was CEO of the Northeast grocery chain Pathmark when that chain was sold to A&P in 2006.
At Walgreens, Standley will inherit a company that has begun a series of partnerships with grocery chain Kroger, including the installation of Kroger-branded grocery departments in Walgreens stores and deployment of certain Walgreens sites as click-and-collect locations. Industry watchers have speculated that Walgreens could potentially serve a role in additional deployments with the Cincinnati-based grocer, particularly as it looks to expand its e-commerce offering to markets such as Florida, where it currently does not operate stores.
Kroger officials have described the partnership with Walgreens as an “exploratory pilot,” from which the companies could develop joint sourcing and supply chain capabilities. “The benefits from the Kroger partnership have been even greater during the COVID pandemic, and we’re continuing to explore how we might be able to expand this partnership,” Gourlay said in a conference call with analysts last month, according to a Sentieo transcript.
Burt P. Flickinger III, managing director of Strategic Resources Group, told WGB in an interview that Standley brings “unparalleled M&A experience” to Walgreens, which he speculated would benefit from a partnership with a staples retailer in a manner similar to CVS’ deal with Target. “They need to partner up with somebody, and it won’t be Walmart, and it can’t be Target,” Flickinger said.“With the Kentucky Derby now coming back, I’d put my money on Kroger.”
Walgreens stock is trading near a 52-week low and is down by 50% over the last five years. Earning estimates were reportedly cut recently by a Bank of America analyst.
“John’s leadership experience and strong understanding of our industry and the U.S. healthcare markets will allow him to hit the ground running, drive our transformation and fulfill our purpose to help people lead healthier and happier lives across America,” said Stefano Pessina, executive vice chairman and CEO of Walgreens Boots Alliance. “Walgreens’ essential role in the healthcare delivery system and in the lives of millions of Americans has never been more important as we continue to work our way through the pandemic together. I’m confident John will build on and grow our momentum at Walgreens and help us compete and win even more in the marketplace.”
Walgreens said Standley would bring extensive operational experience to his role to further deliver on the company’s four key strategic priorities: creating neighborhood health destinations, driving cost transformation, accelerating digitalization and restructuring Walgreens retail offering.
Under Standley, Rite Aid developed its well-regarded “wellness” store format.
“I’m very excited to join the team and lead the iconic Walgreens brand,” Standley said in a statement. “I’m looking forward to accelerating execution of the strategic vision for the future of Walgreens. My top priorities will be meeting and exceeding the needs of our customers, patients, team members and the communities we serve during these challenging times, and ensuring that Walgreens fulfills its full potential as one of America’s most admired and trusted companies.”