Which makes people like me wonder…WTF?
Well, I recently stumbled across a very intriguing blog called Investor Relations Musings. It’s written by John Palizza, a fomer Walgreens insider who was the principal investor relations contact for 15 of his 23 years working at the company. Mr. Palizza states that he left Walgreens in 1999 due to a disagreement with Mr. Rein.
In a post last week, Mr. Palizza openly asked and answered the question that many of us are thinking: Why Not Just Tell Us Why You Fired Him?
The whole post is worth reading, but here is Mr. Palizza’s bottom line on the strategic tension inside Walgreens:
“There seems to be two competing long-term strategies at Walgreens over the past nine months – one that was committed to growth at any price, and one that recognized the limits to growth and sought slower growth with higher returns. When the original acquisition talks with Longs did not pan out earlier this year, it would appear that the Board of Directors endorsed a view towards slower growth.
Then, within sixty days of announcing this new strategy, something changed – my guess is that Walgreens’ CEO bought into some new arguments by investment bankers that they could get the Longs deal done – and they decided to publicly pursue Longs. While technically, the acquisition bid is not at odds with the slowing of “organic” growth previously announced, investors were confused.
Finally, when Walgreens’ CEO couldn’t get the deal done, the Board axed him for both zigging when they had publicly said they were going to zag and failing to be a strong enough leader to get the job done.”
I’ve been similarly confused by Walgreens actions over the past few months. Last Thursday’s Drug Channels post Will the economy hurt drug stores? (answer: probably not) was inspired in part by Mr. Rein’s comments on Walgreens’ September 30 earning call. He said:
"We are facing a continuation of the slowest-growing prescription drug market in 47 years, according to IMS Health. We believe the biggest impact has been the very tough economy." Source
Leave a comment below and tell me what you think happened at Walgreens. Or if you prefer, just tell me who will win the World Series.