Sorting out the speculation and saying good-bye to a friend

A lot was happening in the world of community pharmacy, as we raced to close this issue of Drug Store News — no news bigger than the late October bombshell that Walgreens Boots Alliance would swallow up Rite Aid, in a deal valued at more than $17 billion all in.



Certainly, DSN expects more twists and turns in the story between now and the close of the deal expected sometime in the second quarter of 2016. As we were still releasing pages to our printer, speculation on the number of store divestitures and/or closings the deal would entail varied considerably. In its filing, Walgreens said it was prepared to sell up to 1,000 stores to satisfy the FTC. About a week later, a report from real estate firm Cushing & Wakefield estimated that between FTC-required divestitures and other closings, the total number of stores lost could be as high as 3,000. The next day, a Credit Suisse analyst report put the number needed to appease federal trade regulators as low as 175 stores and as high as 950 stores, well within Walgreens’ limits.



DSN believes that if Walgreens has to part with 3,000 stores, it’s a deal-breaker. That would seem at odds with Walgreens Boots Alliance executive vice chairman and CEO Stefano Pessina’s desired interest in “creating a more comprehensive and stronger platform for the development of our brand presence and the future growth of our business,” as he told analysts during the company’s Oct. 28 earnings call. Given the company’s broader strategy to drive future profitability at the front-end of the store and leveraging exclusive brands like Boots No7 to get there, it doesn’t seem logical that it would spend $17 billion to buy 4,600 stores and close 3,000, just to keep only 1,600 or so. Walgreens could just go back to playing the “hedgehog” and grind out 1,600 more stores for a lot less money.



Lastly, a word about the passing of FMI’s Cathy Polley, and no one could have said it better than Cathy herself: “I live my life to the fullest. We only get so much time on this earth, so wasting it is not an option. I try to surround myself with those who want to join me in making a difference every single day.” That’s what Polley told the organization Disruptive Women in Healthcare, which named Polley a “Woman to Watch” in 2014.



For our money Cathy Polley was a “Woman to Watch” from the day she entered our industry as a Kmart pharmacist in 1982 until the sad day this November that she was called from this world to the next. She was a friend and a partner, and Drug Store News will miss her terribly.