Market News

Jean Coutu Reassumes Company Control

In an unexpected shakeup in North America's fourth-largest drugstore chain, family patriarch Jean Coutu has reassumed the chief executive post of his eponymous company. The 78-year-old founder, chairman and controlling shareholder, who stepped down from that role three years ago, replaces his 50-year-old son Francois. The younger Coutu will take up the title of vice-chairman at the Longueuil, Que.-based firm, and will remain president of the Canadian operations. Brother Michel, 52, meanwhile, will carry on as head of the US division. And Pierre Legault—who is head of the dermatology division of Paris-based pharmaceutical giant Sanofi-Aventis SA and is one of the company directors—has been appointed executive vice-president, in charge of the integration of the Eckerd stores as of mid-January. It is believed that Jean Coutu's return to the helm is an effort to fix the struggling Eckerd stores in the US, and to restore uneasy investor confidence. Last year, the company bought 1,549 Eckerd stores for US$2.4 billion. The Jean Coutu Group Inc. had its debt rating cut one level by Moody's Investors Service recently. The rating, which applies to US$2.9 billion of debt, was cut to B2 from B1, five levels below investment grade. As well, Moody's is not closing the door on the possibility of making further cuts. Source: Canadian Grocer E-Newsletter, November 17, 2005.