Inside This Issue - News
Walgreens, DR execs are Retailers of the Year
January 3rd, 2011
NEW YORK – One man was integral to possibly the most dramatic two-year transformation in the history of chain drug retailing. The second grasped its import early on and helped find a way to turn it to his company’s advantage. The third is making sure its benefits endure.
For these reasons, Duane Reade president Joe Magnacca, Walgreen Co. vice president of corporate development Bob Zimmerman, and John Spina, Walgreens’ corporate vice president for retail integration and new format development, have been jointly named Chain Drug Review’s 2010 Chain Drug Retailers of the Year.
2010 CDR RETAILERS OF THE YEAR:
Joe Magnacca of Duane Reade,
Bob Zimmerman & John Spina of Walgreens
As the chief merchandising officer of Duane Reade before being promoted last summer, Magnacca helped bring what had been drab, functional stores to the vanguard of urban chain drug retailing — not only nationally but worldwide. Zimmerman was instrumental in the negotiations that have made the rejuvenated Duane Reade a crown jewel in Walgreens’ far-flung — and lately multichannel — enterprise. And Spina is overseeing the melding of Duane Reade and Walgreens, with a dedication to bringing together the best practices of each drug store chain.
Given their contributions, and the continued success and innovation of Duane Reade under Walgreens, it’s no surprise that the three have gained tremendous respect for each other.
Magnacca, says Zimmerman, is “the consummate merchant.”
And Spina, says Zimmerman, is bringing to fruition Walgreens’ greatest hopes for the newly acquired stores.
For his part, Spina points out that Zimmerman was integral to the deal: “His acquisition team put the model together. More importantly, he was the face of Walgreens with Duane Reade’s management team, and he helped establish close ties between the two negotiating teams so we could pull this off together.”
As to Magnacca, Spina, speaking as a longtime retailer himself, reflects, “I have a lot of respect for Joe’s talent. He understands drug store retailing, the food business, the beauty business and urban retailing. He’s a very quick study. He learned the U.S. drug store business in a New York minute. And he’s meshing very well with the executive team here at Walgreens. He brings a point of view and capabilities that are very complementary to a lot of the strategies we’re pursuing, and he helps bring a lot of good creative tension to the team.”
Magnacca, meanwhile, calls Zimmerman “the key driver” of the Duane Reade acquisition. “He recognized the acquisition was not just about New York market share but about acquiring some key strengths that truly complemented Walgreens.”
Spina, says Magnacca, was charged with “the daunting task” of integrating the Duane Reade business. “His ability to work both ends to pull the best of Duane Reade and the best of Walgreens has made this — more than an integration — a new business model benefitting both brands.”
Magnacca adds that Walgreens respects the business and the opportunities represented by Duane Reade. “We can become an incubator for their business, testing different concepts from an urban perspective,” he comments. “We can play to some degree in a new arena.”
One of Walgreens’ first objectives with the acquisition was to help accelerate Duane Reade’s transformation, he notes. “When they see the numbers on the converted stores — as does anybody in our business — they get pretty excited.”
Walgreens president and chief executive officer Greg Wasson has been “incredibly supportive” of the continuance of the conversion, adds Magnacca. “He’s the first to say Duane Reade has taken the drug store model and recreated it.”
Walgreens is maintaining Duane Reade as a separate division “to allow us to continue doing what we do well, which is focus on the urban environment,” Magnacca adds.
“We’re obviously going to look for synergies with their business and leverage the mother ship as much as possible. They’re obviously going to leverage some of our learnings back into their business. Everything from private brand to beauty to loyalty programs is a hot button for them, and they’re hot buttons for us. So we align really, really well.”
Already, observers are seeing elements of Duane Reade — such as DR Delish private brand snacks and beverages — being incorporated into Walgreens stores, “which is pretty flattering and pretty exciting for the drug store industry,” Magnacca comments. “For Walgreens to take Delish was a huge compliment. I give them a lot of credit. They’re quite collaborative.”
Duane Reade, meanwhile, stands to gain significantly from Walgreens’ strength in seasonal merchandising, he says. “We think they do a great job with seasonal. We can really leverage their expertise, product knowledge and history in the business. Seasonal isn’t quite the same in an urban market as a rural or suburban market, but clearly they have tremendous buying power, selection and variety. They really get it.”
And the ability of stores from both drug chains to coexist is evident at Union Square in Manhattan, where Duane Reade’s new flagship unit is thriving on 14th Street while a Walgreens outlet across Fourth Avenue is likewise flourishing.
Above all, Magnacca credits Walgreens for seeing that the New York market was up for grabs, and acting accordingly. “The business they picked up was absolutely fabulous, and they want to continue to own it,” he says.
“Moving forward, you’ll keep seeing lots of activity,” he adds. With Walgreens’ financial support, the only restriction on Duane Reade’s continued transformation will be what Magnacca calls “human capital,” meaning lining up contractors and coming to agreements with landlords and co-op boards. “That’s the limiter, not financing.”
And regardless, he says Walgreens and Duane Reade are both “pretty excited about making a difference and converting all the stores that are practical to convert.”
ALSO HONORED BY CHAIN DRUG REVIEW:
• Merchant of the Year: Mark Panzer, Pharmaca Integrative Pharmacy
• Pharmacy Execs of the Year: Kerr Drug Rx management team
• Global Retailer of the Year: Super-Pharm