In what the retailer is labeling a “leadership transition plan and organizational restructuring,” Rite Aid CEO John Standley is stepping down, but he will remain in his position until a successor is found. Additionally, Rite Aid has promoted Bryan Everett, COO of Rite Aid Stores, to COO of the company, and has named Chief Accounting Officer and Treasurer Matt Schroeder to the post of CFO. Everett and Schroeder are replacing Kermit Crawford and Darren Karst, respectively, who are both leaving the company.
Rite Aid also will eliminate approximately 400 corporate positions, accounting for more than 20% of jobs at its headquarters and across the field organization. Approximately two-thirds of the reductions will take place immediately, with the remainder to be cut by the end of fiscal 2020. The retailer anticipates annual cost savings of $55 million from the cuts, with approximately $42 million realized within fiscal year 2020.
“Rite Aid’s Board of Directors is committed to more closely aligning the structure and leadership of the Company with our present scale,” said Bruce Bodaken, Rite Aid’s Chairman of the Board in a statement. “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.”
During fiscal Q3, which ended December 1, 2018, Rite Aid had a net loss from continuing operations of $17.3 million, which was less than the $18.2 million lost during the same period the previous year. Retail same-store sales increased 1.6%, consisting of a 3.1% increase in pharmacy sales and a 1.5% decrease in front-end sales.
Rite Aid has been struggling to find its place in a vertical that has been undergoing unprecedented change, including the $78 billion purchase of insurance company Aetna by rival retailer CVS. Rite Aid had contemplated a merger with supermarket retailer Albertsons, but it was cancelled in August 2018. Prior to that, a plan for Walgreens to purchase Rite Aid fell apart in June 2017.