Inside This Issue - News
CEO’s exit at SDM is a surprise
February 7th, 2011
TORONTO – The resignation of Jürgen Schreiber as president and chief executive officer of Shoppers Drug Mart (SDM), announced late last month, caught the Canadian pharmacy community off guard.
His departure, which will come on February 15, follows what had been a turbulent year for SDM, and indeed for the whole Canadian retail pharmacy sector, as governments moved to reduce drug costs. Last November the company reported its first quarterly, year-over-year, profit decline since it went public in 2001.
Schreiber is to pursue a “private equity position outside North America,” the company reported when it announced the resignation.
The immediate reaction of the stock market to the news of Schreiber’s leaving was negative. SDM’s shares closed at $39.18 on the Toronto Exchange immediately prior to the announcement, which was made after trading hours. By noon the next day, the stock had lost more than 5% of its value, trading around $37.
The chief executive position is to be assumed on a temporary basis by David Williams, currently chair of the drug chain’s board of directors, while an international search is to be conducted for a new top executive. Williams, who has been a member of SDM’s board since 2003, is a seasoned retail executive whose career has included 22 years of service in senior management positions with George Weston Limited and Loblaw Cos. Under the interim management structure Williams will have three of the company’s senior executives, Brad Lukow, executive vice president and chief financial officer; Mike Motz, executive vice president of operations; and Mary-Alice Vuicic, chief administrative officer and executive vice president human resources, reporting directly to him.
Commentators within and outside the industry suggest that the extremely confrontational stance that Schreiber adopted toward the Ontario government and the reforms to community pharmacy remuneration it proposed last spring might not have been the best way to handle a critical negotiation. In the event, Ontario imposed, almost intact, the regime it had initially outlined. Other provinces are following somewhat similar plans, and the effects are showing up in the results of public companies affected.
Schreiber, a graduate of Mannheim University in Germany, has had exceptionally wide international management experience. Prior to joining SDM he served for five years as chief executive, health and beauty Europe, at A.S.Watson, a subsidiary of Hong Kong-headquartered Hutchison Whampoa Ltd., owner of the world’s largest network of health and beauty stores. Prior to that he progressed through senior management positions in the U.K., Germany, Spain, the Netherlands, China and Singapore with Reckitt Benckiser.
During his tenure at SDM Schreiber accelerated the pace of expansion that had been set by his predecessor, Glenn Murphy.