CAMP HILL, Pa. — Rite Aid Corp. is replacing three top executives and cutting about 400 corporate jobs — more than a fifth of its white-collar positions. The chain announced the departures of chief executive officer John Standley, president and chief operating officer Kermit Crawford, and chief financial officer Darren Karst. Rite Aid said the moves — which follow last year’s scuttled merger with Albertsons Cos. and the 2017 collapse of a buyout by Walgreens — were made “to better align its structure with the company’s operations and to reduce costs.” It said the restructuring would save $55 million a year.
The retailer said a search for a new CEO is under way and that Standley would remain in his position until a successor is found.
Bryan Everett, chief operating officer of Rite Aid Stores, was named to succeed Crawford as company COO. Everett, a former Target Corp. executive, joined Rite Aid in August 2015 as executive vice president of store operations. At Target, he held multiple senior leadership positions, ultimately serving as senior vice president of store operations. In that role, he focused on talent management, strategy development, operational efficiency and integrated technology solutions
Matt Schroeder, chief accounting officer and treasurer, was promoted to chief financial officer. The 19-year company veteran was promoted in 2010 to group vice president of strategy and investor relations, and treasurer. Prior to joining Rite Aid, Schroe-der worked for Arthur Andersen LLP, where he held several positions of increasing responsibility, including audit senior and audit manager.
Meanwhile, group vice president and controller Brian Hoover was promoted to chief accounting officer and executive vice president of pharmacy, and Jocelyn Konrad was promoted to executive vice president of pharmacy and retail operations.
Also leaving the company is executive vice president of store operations Derek Griffith. The retailer said it will consolidate additional senior leadership roles, resulting in the elimination of certain positions. It also announced actions that will reduce managerial layers and consolidate roles across the organization, resulting in the elimination of around 400 full-time jobs at headquarters and across the field organization. About two-thirds of the reductions will take place immediately, with the balance coming by the end of fiscal 2020.
Of the expected annual savings of approximately $55 million, some $42 million will be realized within fiscal 2020, the company said. The savings will offset an expected reduction in income associated with Rite Aid’s diminishing obligations under its Transition Services Agreement with Walgreens Boots Alliance, which related to a prior sale of stores. Rite Aid sold 1,900 stores to WBA last year after the latter’s planned buyout fell apart amid government scrutiny. Rite Aid expects to incur a one-time restructuring charge of around $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 restructuring “an important step in positioning Rite Aid for future success.”
“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.”
Standley, who has been CEO since June 2010, also was CEO at Pathmark Stores Inc.