In a stunning announcement out of Deerfield, Ill., earlier this month Walgreen Co.’s chief executive Greg Wasson informed his company’s 244,000 employees and the wider chain drug store community that Joe Magnacca would be moving to Chicago as the drug chain’s new president of daily living products and solutions.

There he will join forces with Bryan Pugh, the merchant who, in two short years as Walgreens’ chief merchandising officer, has been instrumental in returning America’s most storied drug chain to the preeminent position it once occupied in the chain drug firmament.

Wasson’s decision to bring together Magnacca — the Canadian-born and Shoppers Drug Mart-trained retail executive who most recently revived the moribund Duane Reade drug chain, injecting it with a sense of operational purpose and merchandising excitement that made it irresistible to Walgreens as a potential acquisition — and Pugh, who deserves a major share of the credit for translating the retailer’s Customer-Centric Retailing (CCR) initiative, initially viewed in the chain drug community as a seriously flawed concept, into a successful merchandising program, is nothing less than breathtaking in its vision and its possibilities.

Seldom in the annals of chain drug retailing have two powerful merchants toiled successfully for the same company at the same time.

Vern Brunner, when he headed merchandising and marketing at Walgreens, pretty much marched to the beat of his own drummer, with a supporting cast that mostly did what it was told. When Chris Bodine ran merchandising at CVS, Mike Bloom, though very much key to the retailer’s merchandising successes, was clearly No. 2 to Bodine in the merchandising hierarchy. So dominant was Jim Mastrian, first at Revco, then at Rite Aid, that no clearly defined No. 2 merchant ever emerged at either drug chain. During Doug Degn’s tenure as Walmart’s senior merchant for food, consumables, and health and beauty care, though he was surrounded by a hugely capable group of merchants, there was no doubt as to who was in charge.

Such is the nature of the job — and of the people who come to it. But it needn’t be.

Magnacca and Pugh have been offered the unprecedented opportunity to write a new chapter in chain drug retailing by showing the industry what two merchants of unquestioned ability are capable of doing when they pool their considerable strengths and combine their particular abilities, diverse backgrounds and unique range of experience for the benefit of the organization. However, turning opportunity into reality will not be easy.

On paper, Bryan Pugh will be reporting to Joe Magnacca, who, as president of daily living products and solutions (in addition to continuing to lead the Duane Reade chain), will ultimately be responsible for the merchandising and marketing of all front-end products and programs at Walgreens. The belief at Walgreens — and it is a very realistic belief — is that these two merchants will quickly adjust to each other and, by working closely together, prove more than capable of conceiving, developing, launching and ensuring the success of the products, programs and merchandising initiatives that will, Wasson believes, increasingly come to set Walgreens apart from the rest of the chain drug community.

As he said in announcing the new merchandising lineup: “We are bringing together and raising the profile of one of the strongest teams in retail to lead our marketing and merchandising efforts and enhance our daily living products business.” That’s no exaggeration — on paper.

However, still to be determined is whether this tandem is up to the challenge of effectively working together to enhance Walgreens’ daily living products and solutions business. To that end, much will be expected of Magnacca and Pugh in the weeks and months ahead.
They have already formed a strong personal relationship, one based on a mutual respect for what each has accomplished.

Magnacca has already proven, at Duane Reade, that he has the ability not only to lead and delegate but to defer to the merchants who work for him once he understands that a particular merchant is qualified to make a specific decision. Not surprisingly, Pugh has demonstrated the same qualities at Walgreens, not only effectively leading and delegating but willing to defer to his merchants, who are, by background and experience, closer to individual product categories.

The challenge they must master going forward is learning when and how to defer to each other. That is perhaps the most daunting assignment both Ma­gnacca and Pugh face going forward: learning to work together by coming to appreciate and respect each other’s strengths, while gently compensating for each other’s weaknesses.

For now, Greg Wasson’s decision to bring Magnacca to Chicago and team him with Pugh must be reckoned a brilliant stroke, further advancing the already considerable reputation he has acquired in his two years as Walgreens’ CEO. The announcement out of Deerfield has imaginatively and effectively answered two of the nagging questions Walgreens’ competitors and suppliers have been asking for the past year: How will Walgreens most effectively utilize Magnacca’s considerable strengths? And what assignment will Magnacca, in the aftermath of his brilliant success at Duane Reade and the reputation he has acquired by virtue of that success, be willing to accept going forward?

But one key question remains to be answered. Over the next several months the chain drug community will learn what stuff Magnacca and Pugh are made of. Will each be able to adjust to the other by bending a bit, compromising where compromise is called for, and working unselfishly with the other for the benefit of Walgreens? Or will the difficulties prove too daunting for two executives who, for the past two years, have largely had to answer only to themselves?

The people closest to Walgreens insist that this is the dawn of an exciting new day at the company. The feeling here is that they’re right.