Standley to step down as CEO once successor is chosen
As part of the leadership transition, John Standley will step down as chief executive officer. The Board will promptly commence a search process for a new CEO, and Standley will remain CEO until the appointment of his successor.
Rite Aid also announced additional management changes, each of which is effective immediately. Bryan Everett, chief operating officer of Rite Aid Stores has been promoted to chief operating officer of the company, succeeding Kermit Crawford who is leaving the company. Matt Schroeder, chief accounting officer and treasurer, has been promoted to chief financial officer. Schroeder is succeeding Darren Karst who is leaving the company this spring after supporting a brief transition. Brian Hoover, group vice president and controller, has been promoted to chief accounting officer. Jocelyn Konrad, executive vice president, pharmacy, has been promoted to executive vice president, pharmacy and retail operations. Derek Griffith, executive vice president, store operations is leaving the company. Rite Aid also will consolidate additional senior leadership roles resulting in the elimination of certain positions.
In addition, the company announced actions that will reduce managerial layers and consolidate roles across the organization, resulting in the elimination of approximately 400 full-time positions, or more than 20% of the corporate positions located at the company’s headquarters and across the field organization.
Approximately two-thirds of the reductions will take place immediately with the balance by the end of fiscal 2020. As a result of the restructuring, Rite Aid expects to achieve annual cost savings of approximately $55 million, of which approximately $42 million will be realized within fiscal year 2020. These cost savings will serve to offset an expected reduction in income associated with its diminishing obligations under the Transition Services Agreement with Walgreen Co., which related to the prior sale of stores. 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 and today’s announcement is an important step in positioning Rite Aid for future success,” said Bruce Bodaken, chairman of Rite Aid’s board of directors. “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 has 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.”