TW_1170x120

WBA hones operations as it weighs next deal

Print Friendly

In the wake of Walgreens’ merger with Alliance Boots at the end of last year, Stefano Pessina said that the process of bringing together two companies inevitably changes both.

In the wake of Walgreens’ merger with Alliance Boots at the end of last year, Stefano Pessina said that the process of bringing together two companies inevitably changes both.

For the past seven months the new corporate culture at Walgreens Boots Alliance (WBA) has started to emerge, and early indications are that its U.S. retail business is being run with more focus, discipline and efficiency than in the past.

Released earlier this month, financial results for the third quarter reflect that transition. The division’s sales rose 5.3%, paced by a 6.3% gain in comparable stores, and adjusted operating income increased 8.8%. The solid performance was helped by better cost control, the reorganization of field operations and the closure of underperforming stores. Additional moves are forthcoming.

The changes at Walgreens and Duane Reade cast light on an often overlooked aspect of the multifaceted Pessina, whose deserved reputation as a visionary and deal maker overshadows his understanding of the nuts and bolts of day-to-day operations. Pessina, WBA’s executive vice chairman who was just named permanent CEO after serving in that capability on an acting basis since January, is the driving force behind the efficiency initiative, and he intends to continue down that path. While acknowledging the progress that’s been made during a conference call with financial analysts, he was quick to add, "Of course, there is more work to be done."

At the same time, Pessina isn’t neglecting his penchant for capitalizing on emerging opportunities. "I have said many times that I believe the American markets will go through a substantial wave of consolidation horizontally and vertically," he reiterated. "I have said very clearly that we want to be part of this, at the right time with the right partner.

"We are open to any kind of combination that could improve the value of our company, and we are looking actively around us to understand which is the best option for us. But please don’t forget that we are looking actively not just in the U.S. but in other countries, because we consider ourselves a global company."

It’s clear that, as long as Pessina is calling the shots, WBA will keep its feet firmly on the ground even as it strives to take the retail pharmacy and drug wholesale businesses to new heights.


SMITHFIELD_2-12_16

IRI_728x90

Comments are closed.

'