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CAMP HILL, Pa. — The search is on for a new chief executive officer at Rite Aid Corp.
The chain last month announced a leadership transition and organizational overhaul to better align its structure with operations and reduce costs. As part of the transition, which follows two aborted mergers, John Standley will step down as CEO.
Other management changes included the promotion of Bryan Everett, who was chief operating officer of Rite Aid Stores, to COO of the company. He succeeded Kermit Crawford, who left the company. Matt Schroe-
der, chief accounting officer and treasurer, was promoted to chief financial officer. Schroeder succeeded Darren Karst, who is leaving Rite Aid after supporting a brief transition.
Brian Hoover, group vice president and controller, was promoted to chief accounting officer. Jocelyn Konrad, executive vice president of pharmacy, was promoted to executive vice president of pharmacy and retail operations. Derek Griffith, executive vice president of store operations, left the company.
The chain will consolidate additional senior leadership roles, resulting in the elimination of certain positions.
The retailer also will reduce managerial layers and consolidate roles across the organization, eliminating about 400 full-time positions, or more than 20% of corporate jobs at headquarters and in the field. Approximately two-thirds of the reductions took place in March, with the balance coming by the end of fiscal 2020.
As a result of the restructuring, Rite Aid expects to achieve annual savings of some $55 million, of which about $42 million will be realized within fiscal 2020. The savings will offset an expected reduction in income associated with diminishing obligations under the Transition Services Agreement with Walgreens, which related to the prior sale of stores. Rite Aid sold 1,932 stores to Walgreens early last year after a merger with the latter fell through. A planned merger with Albertsons Cos. was subsequently canceled before a scheduled Rite Aid shareholder vote. Rite Aid expects to incur a one-time restructuring charge of approximately $38 million to achieve the targeted cost savings.
“Rite Aid’s board of directors is committed to more closely aligning the structure and leadership of the company with our present scale,” said chairman Bruce Bodaken, calling the leadership shake-up “an important step in positioning Rite Aid for future success.” He added: “These are difficult decisions, and we recognize the implications they have for individuals across our organization. However, it is imperative we take action to reduce the cost of current operations and become a more efficient and profitable company.”
“The board believes that now is the right time to undertake a leadership transition,” Bodaken continued. “We will be focused on recruiting a leader that will best position Rite Aid to create long-term value for shareholders. As we conduct the search process, John has agreed to stay until we appoint his successor.
“We thank John for his outstanding leadership in guiding the company over the past several years. His leadership and expertise have been critical to ensuring the company’s stability and success through an extremely challenging environment. In addition, we are confident that Bryan, Matt and our senior leadership team have the capabilities and experience necessary to effectively guide Rite Aid forward. On behalf of the board, I want to thank Kermit, Darren and all the other departing associates for their service and contributions to the company.”
Everett joined Rite Aid in August 2015 as executive vice president of store operations and was promoted to COO of Rite Aid stores in 2017. Prior to joining Rite Aid, he held multiple senior leadership positions at Target Corp., ultimately serving as senior vice president of store operations. In this role, he focused on talent management, strategy development, operational efficiency and integrated technology solutions. He also led new format, new store and remodel programs while overseeing pharmacy and clinic operations.
Before joining Target, Everett held store operations management positions at Fleming Wholesale and Aldi.
Schroeder joined Rite Aid in 2000 as vice president of financial accounting and was promoted to group vice president of strategy, investor relations and treasurer in 2010. In 2017, he was promoted to senior vice president, chief accounting officer and treasurer.
Prior to joining the company, Schroeder worked for Arthur Andersen, where he held several positions of increasing responsibility, including audit senior and audit manager.
The leadership overhaul follows changes to Rite Aid’s board composition and governance structure, including the naming of three independent directors and the separation of chairman and CEO. The three new independent directors — Robert Knowling Jr., Louis Miramontes and Arun Nayar — were elected at the company’s 2018 annual meeting. Knowling, Miramontes and Nayar replaced David Jessick, Myrtle Potter and Frank Savage.
The new directors bring significant public company experience, strategic planning skills and financial expertise. They joined reelected board members Bodaken, Standley, Joseph Anderson Jr., Kevin Lofton, Michael Regan and Marcy Syms.
Bodaken promised that the changes “will significantly strengthen and enhance the board’s governance oversight.”
