Rite Aid, Walgreens name next-gen execs

Drug Store News, Oct 24, 2005 by James Frederick, Michael Johnsen

NEW YORK -- Either this is one of those types of stories that tend to come in threes, or establishing succession plans is all the rage in retail this season. Because in the wake of the recent management overhaul at Wal-Mart, the list has risen to three: three major retailers in as many weeks that have announced major executive promotions at the highest levels of the organization, as Rite Aid and Walgreens announced changes that move key executives into

Perhaps most notably, areas of greater responsibility 40-year drug store industry veteran Jim Mastrian was named chief operating officer at Rite Aid, filling a spot that has been vacant since Mary Sammons became chief executive officer of the chain in 2003. In addition, Rite Aid also named Mark Panzer and Mark de Bruin to the company's top spots in merchandising and pharmacy, respectively--officially, senior executive vice president/chief marketing officer and executive vice president of pharmacy--introducing a new generation of leadership at the company.

Within a week, Walgreens announced that it had named chief information officer Trent Taylor an executive vice president. The company also made some key moves on the managed care/PBM side of its business, naming Greg Wasson, who heads the company's Walgreens Health Services managed care division, an executive vice president and moving Kermit Crawford from operations to oversee pharmacy benefit management services for WHS.

At Rite Aid, the series of moves is not expected to change the company's go-to-market strategy, its vendor relationships or the company's focus right now, which is to drive pharmacy comp sales higher. "It's a good [move]," noted Steven Baumgarten, a research analyst for Janney Montgomery Scott.

It's a really exciting time for Rite Aid, Baumgarten said, as the chain embarks on a new chapter of potential growth with a new prototype and plans to open 800 to 1,000 stores in the next five years.

"Combining all the functions that directly impact the profitability of our stores under Jim Mastrian's proven leadership will better position us to grow our business and improve our performance, especially in pharmacy," stated Sammons, Rite Aid president and chief executive officer.

While Rite Aid may be setting the stage for the next generation of leadership, the moves are not expected to change how Rite Aid operates internally, and Sammons, who is five years younger than Mastrian, is not expected to retire or leave the company anytime in the near future.

"I think she would like to see this through, at least, and see that complete turnaround where Rite Aid is putting up strong pharmacy comps and, growing the profitability [of the company]," Baumgarten said.

Mastrian's tenure at Rite Aid slightly predates the arrival of chairman Bob Miller and Sammons to what was then a chain near bankruptcy. While Miller and Sammons have been credited with steering Rite Aid back to profitability, Mastrian has been largely credited with engineering the chain's improved front-end sales through a combination of savvy merchandising and marketing programs and improved supplier partnerships.

Panzer, a career marketing and operations executive, will oversee category management, marketing, merchandising and supply chain for Rite Aid. Under Panzer's watch, Rite Aid's front-end store performance already has improved significantly. "Mark's unique combination of operational and marketing expertise will be a major asset in his new role as he continues to develop programs designed to increase transactions, attract new customers and improve the Rite Aid shopping experience," Sammons said.

Panzer will be placed in charge of what is largely considered a strong senior category management team--which includes senior vice presidents of category management Jerry Cardinale and Bryan Shirtliff.

De Bruin will manage Rite Aid's collective pharmacy operations, including managed care, clinical services, pharmacy purchasing, government affairs and the company's new pharmacy benefit management company.

De Bruin, one of the more visible leaders in retail pharmacy, recently was selected to represent the industry on the U.S. Department of Health and Human Services' Medicaid Commission and is chairman of the policy council for the National Association of Chain Drug Stores.

Mark has repeatedly demonstrated his knowledge and expertise in all aspects of the pharmacy business, both at Rite Aid and as a leader in the retail drug store industry, Sammons said. Giving him responsibility for the many functions that directly affect pharmacy, including pharmacy operations, puts an even stronger focus on that critical part of our business."

Both Panzer and de Bruin will report to Mastrian.

Meanwhile, the promotions at Walgreens could provide a clearer picture of its management succession plan.

Perhaps the most far-reaching appointment is that of Taylor, the talented and well-regarded technology guru in charge of Walgreens' continuing efforts to-automate and data-drive its business. Taylor has been promoted to executive vice president and Kermit Crawford chief information officer from senior vice president and chief information officer. "Whenever I consider the technological power we pack into our stores today, I'm grateful for the intelligence, creativity and calm manner Trent brings to Walgreens," said chairman and chief executive officer Dave Bernauer. "He's built a talented staff that keeps our technology ranked among the very top retailers, in the country."