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The new year has gotten off with a stunning development, at least for those with no inside knowledge of chain drug retailing.
Heyward Donigan, Rite Aid’s chief executive, announced she is leaving the company she joined three years ago. Her announcement came at a time of transition for Rite Aid, a period of uneven performance — the retailer recently announced a substantial loss for its most recent quarter — tempered by some serious decisions designed to improve the company’s performance.
Among those decisions were announcements of substantial store closings and a relocation of the company’s headquarters from Harrisburg, Pa., to nearby Philadelphia. Most promising of all was the new, updated look of the Rite Aid drug stores, accompanied by a new emphasis on health care. These plans are designed to bring Rite Aid, the perennial No. 3 in chain drug retailing behind CVS and Walgreens, solidly into the 21st century, an update long planned but slow in coming.
Behind these updates and upgrades was Donigan, a seasoned executive with a strong resume who, despite her apparent reluctance to work out of the company’s Philadelphia headquarters (rather, she works out of her home), appeared to have put the retailer solidly on the road to recovery.
Donigan’s departure leaves many questions in her wake. Foremost among them: Did she jump or was she pushed? It is not the intent here to answer that question — indeed, we do not yet know the answer — but rather, to put her departure into some semblance of perspective. As background, these are challenging times for chain drug retailing, as they are for all of mass retailing. Acceptable performance, if not demanded, is, at the least, expected. And Rite Aid’s performance in recent years has not been acceptable.
Then too, the working community has gotten into the (bad) habit of working off site. No longer is it expected that managers and employees will journey daily into an office to interact with their associates, lead by showing up, and set an example for leaders, staffers and employees about how to conduct themselves, their jobs and their business. Donigan has clearly been lacking in that endeavor.
Third, and finally (for the moment), the former CEO has not been an active participant in the chain drug community. If you doubt that, just ask any employee at the National Association of Chain Drug Retailers. That staffer would be hard-pressed to identify Donigan, much less relate any input she has brought to the association.
So it is that Donigan leaves Rite Aid as little more than a work in progress. Where the retailer goes from here is anyone’s guess.
