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Whatever your position, regardless of your personal bias, however objective your view, the departure of Joe Magnacca from Walgreens — he resigned late last month to accept a job as chief executive officer of RadioShack —was certainly one of the stunning developments that have periodically punctuated chain drug retailing in recent years, an event made more startling for its apparent suddenness.
Just a week prior to his departure Magnacca, who was Walgreens’ chief merchant, had been promoted to executive vice president at the nation’s largest drug chain. Against that backdrop, his resignation shocked the industry, except possibly for those few who suspected that the perennially impatient merchant could no longer resist the urge to run a business as CEO. With RadioShack he will get that chance.
Several points need to be made clear, now that the dust has settled.
For one, Magnacca was, and remains, a hugely popular retail executive, as much for who he was as for what he accomplished at Walgreens. The reason for his immense popularity was a simple one: At a time in mass retailing when all too many senior merchants prefer elusiveness to involvement and seek to avoid interaction with suppliers, Magnacca welcomed that interaction. He was always available, always ready to listen to a new idea, a new concept, a new proposal, a new product idea or introduction.
Rarer still, he was equally willing to act on that proposal, to take a chance, to give a supplier, even an untested one, a chance. In other words, he wanted suppliers to do business with Walgreens — and, more often than most merchants, he gave them the opportunity to do so. Suppliers respected him for this approach — and admired him for taking the position that any proposal was worth considering.
Another reality is that Walgreens appreciated Magnacca’s talents and amply recognized his considerable contributions to the retailer’s success. He was often acknowledged for his role in developing Walgreens’ “flagship” stores, that small but significant group of superstores that took drug store retailing to a new level of consumer acceptance. He was promoted as quickly as new opportunities came available. And he was welcomed and treated as an equal at the retailer’s highest management levels, significant because he was an outsider in a company that didn’t have much experience integrating outsiders into its way of retail life. Observers sometimes forget that Magnacca had only been with Walgreens three years when he left.
More obscure are the events immediately surrounding Magnacca’s departure. However, it is probable that Walgreens CEO Greg Wasson promoted him because he deserved to be promoted. It is equally probable that the promotion caught Magnacca unaware, at least as far as its timing was concerned. As subsequent events came to light, there’s no doubt that RadioShack pursued Walgreens’ head merchant or that Magnac-ca’s promotion greased that pursuit and sped his departure.
No matter. The story is over. In its aftermath, two questions remain to be answered. The first: Was this the right decision for Magnacca? Opinions are split, with the majority believing that his challenge at RadioShack is indeed a daunting one but that he has earned the opportunity to pursue it. Many of those same people, however, believe his future at Walgreens would have been brighter over the long term had he remained in Chicago.
Second question: Will Walgreens survive? This, of course, is a question only those unfamiliar with Walgreens would even consider asking. Walgreens is a world-class retailer, fresh off the stunning acquisition of a sizable portion of Alliance Boots, the world-class Europe-based drug retailer/wholesaler. That alliance has brought to Walgreens a group of immensely talented retail and wholesale executives, a group that, given the chance, will have no difficulty compensating the retailer for the loss of Magnacca.
Alliance Boots aside, however, Walgreens is a hugely capable organization staffed with a variety of experienced and professional retailers and managers. In a very short time they will make the supplier community forget Joe Magnacca, especially if, having learned from Magnacca’s enlightened way of doing business, they welcome the supplier community and the myriad possibilities that community represents for embracing the business opportunities that are abundant at the newly reenergized Walgreen Co.
