The Wall Street Journal reports that drug store chain Rite Aid, “facing investor pressure amid disappointing performance, disclosed plans Tuesday to replace three of its top ranked executives, including Chief Executive John Standley.”
Four hundred corporate jobs will be eliminated at Rite Aid, or more than 20 percent of the headquarters total.
“Also leaving the company are Chief Operating Officer Kermit Crawford, Chief Financial Officer Darren Karst and Derek Griffith, executive vice president for store operations,” the story says. “Mr. Crawford is being succeeded by Bryan Everett, who is currently operating chief of Rite Aid Stores, and Mr. Karst by Matt Schroeder, chief accounting officer and treasurer.” Standley reportedly will remain in the CEO job until a replacement is hired.
The story notes that “Rite Aid, which has lost more than half its market value over the past year, expects to post another annual loss and sales decline for the year that ended March 2.” These changes come “comes months after shareholders rejected the company’s executive-pay program and a prospective merger with grocery chain Albertsons Cos. fell apart. Rite Aid and Albertsons called off the deal in August, about six months after the deal was struck, as it became clear that a key group of investors was against it.”
Standley was a proponent of the deal, and was slated to become CEO of the combined Albertsons-Rite Aid entity once it had been completed, with Bob Miller remaining as chairman. Instead, after it fell apart, Jim Donald, who had been serving as Albertsons’ president/COO, became CEO.
Four hundred corporate jobs will be eliminated at Rite Aid, or more than 20 percent of the headquarters total.
“Also leaving the company are Chief Operating Officer Kermit Crawford, Chief Financial Officer Darren Karst and Derek Griffith, executive vice president for store operations,” the story says. “Mr. Crawford is being succeeded by Bryan Everett, who is currently operating chief of Rite Aid Stores, and Mr. Karst by Matt Schroeder, chief accounting officer and treasurer.” Standley reportedly will remain in the CEO job until a replacement is hired.
The story notes that “Rite Aid, which has lost more than half its market value over the past year, expects to post another annual loss and sales decline for the year that ended March 2.” These changes come “comes months after shareholders rejected the company’s executive-pay program and a prospective merger with grocery chain Albertsons Cos. fell apart. Rite Aid and Albertsons called off the deal in August, about six months after the deal was struck, as it became clear that a key group of investors was against it.”
Standley was a proponent of the deal, and was slated to become CEO of the combined Albertsons-Rite Aid entity once it had been completed, with Bob Miller remaining as chairman. Instead, after it fell apart, Jim Donald, who had been serving as Albertsons’ president/COO, became CEO.
- KC's View:
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The argument for the merger of Albertsons and Rite Aid always was that it would give the combined company even greater geographic penetration, and would help Rite Aid compete more effectively with the likes of CVS and Walgreens. But I always thought that Rite Aid’s problems had more to do with a lack of imagination and innovation, not locations … and I was never sure that Standley was the guy to make it all work.
It is interesting that since becoming CEO, Jim Donald has embraced a “we-have-to-move-from-four-walls-to-no-walls” strategy, understanding that imagination and innovation are ultimately at least as important as location, if not more so, in the current competitive environment.
