Starbucks had announced Brewer’s departure earlier in the day, saying she is leaving at the end of February for a CEO position at an undisclosed publicly traded company.
As CEO of Walgreens, Brewer will be the only Black woman leading a Fortune 500 company.
Her departure from Starbucks comes as investors, regulators and activists push for more diversity in corporate America. Nasdaq has proposed changes that would push for greater racial and gender diversity on the boards of publicly traded companies listed on its exchange.
The Wall Street Journal first reported Brewer’s decision to join Walgreens.
Walgreens shares rose nearly 8% in extended trading on the news. The stock is down 5% over the past 12 months, bringing its market value to $42.50 billion.
Pessina’s plans to step down
Pessina announced his plans to step down as CEO in July. He is one of the drugstore chain’s largest individual investors and plans to continue to serve on the board as executive chairman.
Brewer joined Starbucks’ board in 2017 and became its chief operating officer later that year after serving as CEO of Sam’s Club, which is owned by Walmart. She was the first Black woman to be COO of Starbucks and to head a division at the big-box retailer. Prior to her time at Walmart, she worked for consumer packaged goods giant Kimberly-Clark.
In her current role, Brewer deals with a wide range of responsibilities, from technology initiatives to the creation of new coffee drinks. She was widely expected to be the successor to current CEO Kevin Johnson. After she leaves, her responsibilities will be split between CMO Brady Brewer and Rossann Williams, who serves as president of company-operated locations in the U.S. and Canada.
Challenges ahead at Walgreens
At Walgreens, Brewer will face numerous challenges as the company looks to turn around its business and create new revenue streams. The drugstore chain struggled in the early months of the pandemic as foot traffic dropped, particularly at its Boots stores in the United Kingdom. The company reported earlier this month that sales were picking up but reiterated its outlook for low single-digit earnings growth.
The drugstore chain has been cutting costs in some areas and investing in others. It closed hundreds of Walgreens and Boots stores last year and cut the size of its workforce.
Walgreens’ bigger rival, CVS Health, acquired health insurer Aetna and was quicker to expand in health-care services. CVS opened Minute Clinics, and Walgreens has been playing catch-up.
Brewer also sits on the board of Amazon, a company that’s been cutting into drugstore sales both in the front of the store as well as behind the pharmacy counter as more customers buy toothpaste and refill prescriptions online.
Starbucks has also recently announced the retirement of its CFO, Pat Grismer. He will be replaced by Rachel Ruggeri, who serves as senior vice president of finance for the Americas division, starting Feb. 1.
Shares of Starbucks fell more than 1% in extended trading on Tuesday after the chain reported its fiscal first-quarter results. It beat analyst estimates for its earnings, but its sales recovery in the U.S. faltered as Covid-19 cases increased during the quarter.