By Dana Mattioli and Cara Lombardo 

Walgreens Boots Alliance Inc. is set to name Starbucks Corp. operating chief Roz Brewer as its next chief executive, according to people familiar with the matter, setting her up to be the only Black female leading a Fortune 500 company today.

Ms. Brewer will replace Stefano Pessina, who said in July that he would step down as CEO once the drugstore company found a new leader. Mr. Pessina, one of Walgreens' biggest individual investors, said he was planning to stay on the company's board and serve as executive chairman.

Shares of Walgreens, which has a market value of around $43 billion, rose 7.4% after hours after The Wall Street Journal reported on the move.

Starbucks said Tuesday that Ms. Brewer was leaving at the end of February for a new role at another public company. Before joining the coffeehouse chain, Ms. Brewer was CEO of Walmart Inc.'s Sam's Club division for five years.

Ms. Brewer, 58 years old, has been operating chief and a member of the board at Starbucks since 2017. She helped shift Starbucks toward a focus on to-go operations during the pandemic and has worked to diversify the company's leadership. Starbucks last fall said it would tie executive compensation to increasing minority representation in its workforce, and mandated antibias training for company leaders.

In 2019, Ms. Brewer joined the board of Amazon.com Inc. amid pressure on the company to add more diversity to its board. Amazon has been increasingly expanding into the health care space, becoming more of a competitor to companies such as Walgreens and CVS. In 2018, Amazon bought online pharmacy PillPack for $1 billion.

Walgreens, the largest U.S. drugstore chain, has been struggling to turn itself around, an effort complicated by the coronavirus pandemic. Mr. Pessina, an Italian billionaire, took over five years ago following the merger of Walgreens and European pharmacy chain Alliance Boots.

Where rival CVS Health Corp. has built itself into a health-care behemoth through acquisitions of pharmacy benefit manager Caremark in 2006 and insurer Aetna Inc., Walgreens shifted away from all-out acquisitions after unsuccessful attempts to buy insurer Humana Inc. and pharmacy rival Rite Aid Corp.

Walgreens recently announced plans to sell much of its wholesale pharmacy business in Europe, narrowing its focus on its U.S. namesake chain and the Boots pharmacy chain in the U.K.

Reduced store traffic amid the coronavirus pandemic is exacerbating Walgreens' retail struggles, and the company's efforts to transform itself into a provider of health-care services have yet to take hold. The company also is expected to play a central role administering the Covid-19 vaccine to the American public. Along with CVS, Walgreens worked with the federal government to administer doses at the nation's long-term-care facilities.

In its latest quarter, the pharmacy chain's profit fell 25% even as overall revenue rose and the company worked to cut costs. Retail pharmacy sales increased 1.6% in the U.S., well below expectations, and executives said prescription volumes were weaker than planned.

Last year, Walgreens was among the worst-performing members of the Dow Jones Industrial Average, with its shares falling 29.4%. The index gained 7.3% in 2020.

The first African-American and first woman to lead a Walmart business unit, Ms. Brewer joined the retail giant in 2006 after two decades at Kimberly-Clark Corp., where she started as a chemist. She is a graduate of Spelman College, where she chairs the board of trustees.

There are four Black CEOs in the Fortune 500: Kenneth Frazier of pharmaceutical giant Merck & Co., Marvin Ellison of hardware store chain Lowe's Cos., Roger Ferguson Jr. of TIAA, a financial services firm, and René Jones, who runs M&T Bank Corp. in New York.

The number of women running Fortune 500 companies hit an all-time high last year at 37 and more have since been appointed.

Write to Dana Mattioli at dana.mattioli@wsj.com and Cara Lombardo at cara.lombardo@wsj.com

 

(END) Dow Jones Newswires

January 26, 2021 19:06 ET (00:06 GMT)

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