Walgreens names new CEO

[ClownLoach]

Walgreens has named the former ExpressScripts CEO to run the company. I'm already not impressed just from the few carefully scripted talking points he delivered in this article.

https://www.cnbc.com/2023/10/11/walgree ... t-ceo.html

[storewanderer]

Let's go for the quotes:

QUOTE:
“I came from one of the great efficiency companies at Express Scripts — I mean, we were built to drive out waste from health care and and we looked at everything through that lens. And that has to do by starting with our own cost structure, and there’s no question inside this company that’s every bit as important,” said Wentworth."

QUOTE:
"“When you’re in a business that’s having to respond that quickly to something that is that unusual. You don’t get it all right. And I have no doubt that the leadership at Walgreens is taking a look and listening to their folks,” he said. “As a leader, I can tell you, there’s nothing that motivates me more than ensuring every employee feels like they’re supported in that mission.”"

Reading things like the above, Rite Aid on the brink, doesn't make me feel too good about the future of the retail drugstore industry in the US.

[veteran+]

Listening to their folks.........................

Supporting their employees....................

THAT'S rich!

[ClownLoach]

Listening to their folks.........................

Supporting their employees....................

THAT'S rich!

Never a good thing when you blow all your credibility in the first couple hours as CEO. He just got there... He has no clue who's listening to or supporting anything.

This dude talks like he's reading out of his entry level Management textbooks. Seeing how payroll and staffing has been slashed to the bone already at Walgreens I'm very concerned about his proposals to look at everything through a cost structure and "waste reduction" lens. Staffing is waste? He might as well start changing out the sales floor to vending machines already. Their cost structure problems need to be solved from the top down so that their stores are adequately staffed and pharmacists aren't overworked and terrified they'll make an error that sickens or kills a customer. This guy sounds like he only understands cutting costs, not reinvesting in the business for long term success.

I'm guessing the fact this is the best they could do means that Walgreens is in much more trouble than we might have thought, and worse they've already proven incapable of recruiting a credible leader to address the problems. And haven't they lost 2 or 3 other C-suite folks? Never a good sign when they're leaving like rats jumping from a sinking ship.

[storewanderer]

Actually this comes off as a high profile hire. Wall Street seems to be VERY impressed.

I find it ironic that the person who led Express Scripts, an enterprise that worked to completely screw over pharmacies, is now going to be running the pharmacies and already appears to have huge ideas on how to cut costs. I just cannot even imagine what these ideas must be.

Given the current state of Walgreens I do not think coming in and immediately talking about "DRIVE OUT WASTE" and the fact that BEFORE HE EVEN STARTS WORKING THERE he has already suggested that he believes "THERE'S NO QUESTION INSIDE THIS COMPANY..." strikes me as more than premature.

[Alpha8472]

In 2012, Walgreens stopped accepting Express Scripts insurance plans due to disputes over reimbursement rates for prescription drugs.

It was years before they settled their disagreement. Express scripts seeks to kill off competing pharmacies by offering terrible reimbursement rates. It is like hiring an enemy that tried to wipe your country off the face of the Earth.

[storewanderer]

Walgreens had many makings to be a great retailer, before over-expanding and getting involved with Boots.

They had a fleet of well located, well positioned stores. The company was debt free. The company staffed its stores better and paid higher wages than competitors. Their technology was always weak and that was a problem given their aggressive expansion.

But what really tanked them was getting involved with Boots. Getting involved with Boots and then taking on significant debt, combined with the exit of various tenured management, set the company up for a new path. And it hasn't been a good path.

Reading further into what this new CEO says where he talks up the scope and scale of Walgreens, I do tend to agree with that. The company has so many stores and does so much volume that clearly it is a ship that must be righted. This is not a ship that is going to just sink. But it won't be easy to right this ship. And coming in with a chainsaw/cost cut mindset as opposed to a "watch and learn for a while" mindset may be enough to sink this ship.

[ClownLoach]

Actually this comes off as a high profile hire. Wall Street seems to be VERY impressed.

I find it ironic that the person who led Express Scripts, an enterprise that worked to completely screw over pharmacies, is now going to be running the pharmacies and already appears to have huge ideas on how to cut costs. I just cannot even imagine what these ideas must be.

Given the current state of Walgreens I do not think coming in and immediately talking about "DRIVE OUT WASTE" and the fact that BEFORE HE EVEN STARTS WORKING THERE he has already suggested that he believes "THERE'S NO QUESTION INSIDE THIS COMPANY..." strikes me as more than premature.

Wall Street LOVES when non-retail guys like this start running retailers because they think that there are magical secret costs that "real" retail executives are afraid to cut, "sacred cows" that only an industry outsider can slay and thus deliver tremendous increases in quarterly earnings. He is already spouting preposterous bulls___ and hasn't even reported to work yet. Jim Cramer says this guy is fantastic, that alone makes me deeply concerned about the future of Walgreens. He's going to kill this company faster than Tritton did in BB&B.

My guess is that he's going to find a way to kill the entire retail operation because that's what the Express Scripts type people want. I wonder if he would engineer a deal where they take over Walmart pharmacy operations (similar to how CVS ruined took over Target pharmacy) and then just liquidate the stores in an effort to "cut costs"?

[veteran+]

A ONE BILLION dollar cost cutting campaign from the get go from this Shark.

It will be more than 1 billion.

Bye bye Walgreens

[storewanderer]

A ONE BILLION dollar cost cutting campaign from the get go from this Shark.

It will be more than 1 billion.

Bye bye Walgreens

To give credit where credit is due, the ONE BILLION dollar cost cutting campaign is the brainchild of the current interim management (I also wonder what part the Board of Directors plays in this ONE BILLION dollar cost cutting campaign).

So I don't give this new CEO credit for being the brainchild of the ONE BILLION dollar cost cutting program.

But he certainly gets tasked with executing said program. And I suspect he is also the one to "find" the ONE BILLION dollars worth of costs to cut.

This equates to cost cuts of about $111k per store. 1 billion / 9,000. The stores are already disgustingly understaffed. I don't know how they can cut anything further from the stores. I do know Walgreens salaried managers in the store have it pretty easy; 50 hour weeks are rare and many just work 40ish hour weeks but the better managers who run better stores have to spend a lot of that time in the pharmacy. I supposed they can get harder on the salaried store manager and demand 60 hour weeks like many retailers. Like when I went to CVS on Sunday night at 8:30 PM last week and the store manager was running the store alone. You would NEVER see that at Walgreens.