‘Time to sell boots,’ says half of billionaire chemist-owner couple

Growing up near Genoa in Italy, young Ornella Barra dreamed of becoming a doctor. She never imagined that she would one day become half of the most powerful business couple on the planet.

Today, she’s the international chief operating officer of pharmaceutical giant WBA, whose empire includes Boots the Chemists, which is up for sale – likely to private equity.

His longtime partner is legendary marketer, Italian billionaire Stefano Pessina, who established Walgreens Boots Alliance and serves as its executive chairman. When they’re not traveling around the world for work, they live together in Monaco.

Hard to say goodbye: Ornella Barra could keep a seat on the Boots board after a sale of the pharmacy

Barra is taking the lead in presentations from management to potential buyers of Boots, including British private equity firm TDR, backers of the billionaire Issa brothers, owners of Asda. Other potential bidders are the US Apollo takeover barons and rival firm Sycamore Partners. A consortium made up of Bain Capital and CVC Capital failed to submit a first-round bid.

Ironically, given her future success, Barra was discouraged by her family from pursuing a career in medicine on the grounds that it would be too difficult to reach the top.

“I wanted to become a surgeon, but 50 years ago it wasn’t the best profession for women because it was dominated by men,” she says. Instead, she studied pharmacy at the University of Genoa – a decision that led her to cross paths with Pessina.

Over the nearly 40 years of their extraordinary professional and personal partnership, the couple have built a healthcare and pharmacy business spanning the United States, Latin America and Europe.

Now they have hoisted a ‘for sale’ sign on Boots, after 16 years of ownership.

Despite the sale, Barra, 68, claims a deep affection for the British chain, saying: “I love Boots”. I like how close it is to the community. Eighty-five percent of the UK population live within ten minutes of a store. This reflects my DNA as a pharmacist.

A follower of the No7 serums, which have developed a cult following among British women, she also recommends the Dual Defense cold remedy to anyone she meets with a sniffle. And she is, she says, “very, very proud” of the staff during the closures.

There is speculation that this may not be a final goodbye to Boots and that WBA may, in fact, retain a minority stake – and Barra a seat on the board.

Be that as it may, becoming the owner of Boots was no small feat. Sales have been hammered during the pandemic. Although it was allowed to trade in lockdown because it was classified as an essential retailer, fewer people entered downtown stores.

The company has been forced to announce 6,000 job cuts, or one in ten, over the past two years.

Even before Covid devastated footfall, like other traditional brick-and-mortar retailers, Boots had to manage a large store base, with some stores in the wrong location or too close to another branch. Some 200 stores have been designated for closure. And while 19 new stores have opened in prime locations and others have undergone impressive renovations, some still look dated. Boots has faced competition from online operators such as Amazon and supermarkets, which have expanded into personal care and toiletries.

High hopes of transforming No7 from a British bathroom cabinet staple into an international superbrand have yet to fully bear fruit. Boots remains a much-loved and trusted name, and the latest online sales figures for the company’s first fiscal quarter – the three months to November 30, 2021 – nearly doubled from the same quarter just before Covid hit. The digital sector, in which Boots has invested more than £70m in three years, is booming.

Total retail sales during the same quarter increased by 16.3% compared to the same period a year earlier. So why sell the chain of 2,263 stores now?

“We have started a very big reorganization at Boots to shape the business in the right way, to develop three important pillars, health, pharmaceuticals and beauty,” explains Barra. “The team and I have been working on creating the right foundations for growth over the past three years. Now it’s in good shape. It’s the right time to enter a new era.

“WBA has decided to focus particularly on the United States and on health, and it is difficult to manage everything. It is important in life to make choices.

The first big divestment came last year, with the sale of wholesaler Alliance Healthcare for £4.6bn. Boots is next on the block, with an estimated price tag of £7 billion. The firm has previous experience in private equity ownership. In 2007, Pessina, which now owns 17% of WBA, partnered with KKR in what was then Europe’s biggest ever leveraged buyout, funded by £10bn of debt. The deal immediately stoked fears of asset stripping and unsustainable borrowing, which for once turned out to be unfounded.

Boots is part of a much larger group, joining forces with the American chain Walgreens. Despite the “pandemic predator” controversy, Barra says another stint in private equity custody will be good for the retailer.

“I remember the very interesting period from 2007 to 2014 with KKR. Boots had a very good experience, ”she says. She is, she adds, very aware of the need to find a responsible buyer, account given Boots’ unique place in the UK and in the healthcare system. According to her, the 51,000 employees are paramount. “We will be very careful. A buyer who will be responsible to the employees, for me it is priority,” she says, with an Italian cadence. English is her fourth language after her mother tongue, French and Spanish.

Many UK retail shareholders may wish to see Boots return as an independent company to the UK stock market.

Initially, she says, they considered floating boots as part of an initial public offering (IPO). “At first we had the idea of ​​an IPO, but we didn’t start the process because the offers came in,” she says. So, isn’t an IPO possible? She replies: ‘In WBA style, it’s all on the table.

“If the offerings are not in line with our expectations, we could revert to an IPO.” At the moment, however, that seems unlikely.

Barra met 80-year-old Pessina in 1984 when she was looking for a business, not romantic, partner.

This was the start of a lasting relationship, built on a mutual addiction to work.

“It’s easy because he’s the architect and I’m the engine,” she says. ‘Stefano is the negotiator. Then when you close a deal, it’s important to grow the business, to create a common culture, to work with the team. It’s my job.

“He is the boss in professional life. We have a very strong complementary relationship and a very good understanding.

Both sound like complete workaholics. An associate says, “You can call any time, day or night, except Sundays before 2:30 p.m. This is the only time they rest.

His job as Chief Operating Officer is to oversee all of WBA’s business outside of the United States.

“Before Covid, I lived on a plane,” she says. Vacations do not exist in his world.

“For me, a vacation means working five hours a day and after that maybe having dinner,” she explains. “But it’s not a job for me, it’s a pleasure. I work with a lot of passion. People talk about stress, but personally I don’t know what it means.

One of Barra’s proudest moments came in January 2015 – ringing the bell on the Nasdaq stock market in New York to celebrate the merger of Boots and Walgreens. “It was emotional. I remember, it was snowing, it was cold, but I didn’t care, it was a fantastic day. If you ask me if, 50 years ago, could I imagine this – no .

Her advice to others aiming for the top is one that goes against the orthodoxy that women — or men — can have it all.

“Be prepared to make sacrifices, because you can’t do everything in life,” she says. ” It’s a question of choice. I don’t spend time at the gym or at a spa.

In the pre-Covid era, walking around WBA stores chatting with staff and checking shelves meant she didn’t need the gym anyway. “I took my 10,000 steps,” she laughs.

His advice? “Support your colleagues and trust them. Avoid conflict and jealousy. And it is important to stay calm. Not all problems are disasters.

Some links in this article may be affiliate links. If you click on it, we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any business relationship to affect our editorial independence.