Tim Barry is leaving as chief executive officer of VillageMD, the clinic operator that has cost … [+]
Walgreens Boots Alliance
Tim Barry is leaving as chief executive officer of VillageMD, the clinic operator that has cost its majority owner, Walgreens Boots Alliance, billions of dollars in financial losses.
In a statement, VillageMD said Barry “has stepped down as CEO and Board Chair.” Barry founded VillageMD in 2013 but the company has since struggled to fill its clinics attached to Walgreens with patients and has scaled back dramatically on the expansion of doctor practices it managed and Village Medical clinics the company opened attached to Walgreens.
“The Board has appointed VillageMD Chief Operations Officer Jim Murray to serve as Interim Chief Executive Officer,” VillageMD said Wednesday afternoon in a brief statement. “Effective immediately, Murray assumes day-to-day leadership responsibilities to ensure a smooth transition and continuity of care. VillageMD reaffirms its commitment to providing high-quality, accessible health care services for individuals and communities across the United States.”
But Walgreens earlier this year said it was looking to reduce its investment in VillageMD after billions of dollars in losses and the need to focus on more profitable ventures to turn around the drugstore chain.
Walgreens chief executive officer Tim Wentworth told analysts in June the company would remain an investor and partner, but is working with VillageMD’s management “toward an endpoint.” At that time, VillageMD ran 89 Village Medical at Walgreens clinics attached to drugstores. VillageMD also includes CityMD, a provider of urgent care centers and Summit Health, a multispecialty medical group.
Walgreens held a 53% ownership stake in VillageMD as of July.
“We believe in the future of these businesses and intend to remain an investor and partner, but as part of our persistent focus on value creation for WBA, we are collaborating with leadership toward an endpoint to rapidly unlock liquidity and enhance optionality and position them for additional growth,” Wentworth told analysts and investors on the company’s fiscal third quarter earnings call.
Walgreens invested more than $6 billion in VillageMD under former chief executive Roz Brewer to take a controlling stake. In 2020, Walgreens said it planned to open 500 to 700 “Village Medical at Walgreens” physician-led primary care clinics in more than 30 U.S. markets over five years, with the “intent to build hundreds more thereafter.”
The investment hasn’t gone well. Walgreens total operating loss for the first nine months of fiscal 2024 has grown to $13.1 billion, reflecting “a $12.4 billion non-cash impairment charge related to VillageMD goodwill, which resulted in a $5.8 billion charge attributable to WBA, net of tax and non-controlling interest.”
