Pessina will become executive chair of the board once his successor is named, the drugstore retailer said in a press release. Board chair James Skinner will step down at that point, but "remain on the board to facilitate a smooth leadership transition."
Earlier this month, Walgreens reported a 0.1% sales bump in the third quarter, when non-cash impairment charges of $2 billion in its Boots business led to a $1.6 billion operating loss, from operating income of $1.2 billion the year before. Adjusted operating income fell 46.5% to $919 million, per a July 9 press release.
Pessina oversaw Walgreens' failed attempt to take over rival drugstore Rite Aid, which was scuttled three years ago by U.S. federal regulators over antitrust concerns.
Since then the company has made the best of it. Walgreens did end up buying several Rite Aid stores, shutting many of them down in some areas, and has invested in partnerships to further both its healthcare and front-of-store ambitions. But that has gotten them only so far, and Walgreens has also focused heavily on cost cuts.
Walgreens is being overshadowed by CVS Health, which went so far as to buy a health insurer and cease tobacco sales in order to solidify its position as a healthcare provider. Drugstores in the U.S. in general in recent years have worked to deepen their medical services as consumers search for ways to avoid the expense and hassle of traditional medical care.
That has relegated their retail operations to become mostly an afterthought, although lately they have benefited from their status as essential retailers, allowing them to keep stores open during the COVID-19 pandemic.
Meanwhile, Walgreens has had to navigate operations globally. The company said it "has a presence in more than 25 countries, employs more than 440,000 people, has more than 18,750 stores and offers an extensive portfolio of highly-regarded product brands."
Its superior performance abroad in discretionary categories like beauty actually hurt more recently as consumers focused on lower-margin essentials, according to GlobalData Retail Managing Director Neil Saunders.