Nick Fabrizio

Senior lecturer, Cornell Jeb E. Brooks School of Public Policy

Nick Fabrizio, senior lecturer of health policy at Cornell University, says Walgreens remains a major player in the pharmacy and retail sectors.

Fabrizio says:

“The rise of e-commerce and shifting consumer preferences have put pressure on the traditional brick-and-mortar model, exposing its vulnerabilities. Despite these headwinds, private equity firms may see Walgreens as a prime investment opportunity, recognizing the potential to streamline operations, unlock hidden value and accelerate the company’s shift toward healthcare services.

“Despite recent financial struggles, Walgreens remains a major player in the pharmacy and retail sectors, offering stable cash flow — a key ingredient for leveraged buyouts. Private equity investors often target companies like Walgreens with strong core businesses but underperforming segments, seeing an opportunity to cut costs, streamline operations, and boost profitability.

“Real estate is another factor — Walgreens owns or leases valuable properties nationwide, which could be sold or repurposed to unlock hidden value. Additionally, investors may consider breaking up the company, spinning off its retail or healthcare units to maximize returns.

“Ultimately, private equity sees Walgreens not just as a pharmacy chain but also as a complex asset with the potential for transformation and significant financial upside.”

Rosemary Batt

Professor of Women and Work

Rosemary Batt is a professor in the Industrial and Labor Relations School, where her research focuses on the financialization of the healthcare industry.

Batt says:

“Everyone should be very concerned about the private equity buyout of Walgreens, especially in smaller towns where there may only be a couple of retail pharmacies in the area.

“The business model for private equity firms, like Sycamore Partners, is to use excessive debt to finance their acquisitions, and then load that debt onto the company and then start squeezing already narrow operating margins in the case of retail, which then leads to net revenue losses, financial distress, and frequently bankruptcy.

“The companies themselves are often blamed for these bankruptcies because they are ‘mismanaged’. In reality, the private equity partners are the ones pulling the mismanagement strings from behind the scenes.”