Rite Aid shakes up exec team, names Standley COO

Chain Drug Review, Oct 13, 2008

CAMP HILL, Pa. -- John Standley has returned to Rite Aid Corp., assuming the roles of president and chief operating officer.

The 45-year-old Standley, who for the past several months has served in an advisory capacity to Rite Aid, takes over the presidency from Mary Sammons, who remains chairman and chief executive officer. As COO, Standley replaces Robert Easley, who has left the company.

Standley was Rite Aid's senior executive vice president, chief financial officer and chief ad ministrative officer when he left the chain in 2005 to head Pathmark Stores Inc. He had been with Rite Aid for six years.

Rite Aid also named Frank Vitrano CFO and CAO. He fills the roles of CFO Kevin Twomey and CAO Pierre Legault, who have left the company.

In another management change, Mark deBruin resigned as executive vice president of pharmacy at the end of September. A replacement had not been named at presstime.

Vitrano served as president, CFO and treasurer at Pathmark from 2002 through 2007. Standley was the supermarket company's CEO from 2005 to 2007.

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"This is the right time for these changes as Rite Aid focuses on delivering strong value for shareholders, suppliers, customers and associates in a challenging business environment," says Sammons. "With the integration of Brooks Eckerd behind us and same-store sales in the acquired stores continuing to trend upward, the key task before us is to drive profitable growth.

"John and Frank are seasoned executives who have proven they can work through challenging situations and achieve growth and value through a combination of operational excellence, commitment to a high level of service and effective cost management."

At Pathmark Standley engineered a turnaround before the company's sale to A&P in 2007. He oversaw the implementation of new financial controls and was integrally involved in the development of the company's current information systems, real estate strategy and compliance programs.

"John spearheaded a remarkable success story at Pathmark, and while at Rite Aid earlier this decade he was a key member of the team that helped turn around our operating results, notes Summons. "I am confident that he is ready to hit the ground running."

Vitrano, 53, served in a variety of positions during a 35-year career at Pathmark, where he also was instrumental in driving the company's comeback. In combining the CFO and CAO functions at Rite Aid, he is expected to help the chain further improve operational efficiency.

"Frank forged a strong partnership with John at Pathmark, which will enable them to begin working quickly with me to deliver results for Rite Aid," says Summons.

Shortly after announcing the appointments, Rite Aid reported a same-store sales gain of 1.7% in September. Front-end comparable-store sales rose 3.4%, and pharmacy same-store sales increased 1%, including a 261-basis-point negative impact from new genetic debuts.

For the four weeks ended September 27, same-store sales, excluding the acquired Brooks Eckerd Pharmacy units, increased 3.2%, with front-end same-store sales up 3.1% and pharmacy same-store sales growing 3.3%.

Comparable-store sales at the Brooks Eckerd outlets decreased 1.2%, in contrast to a 2.7% decline in August. Front-end same-store sales rose 4.5%. Pharmacy same-store sales fell 2.9%, compared with a 4.6% decline in August.

"Once again our core stores delivered solid gains, and our acquired stores posted a significant increase in the front end and good improvement in the pharmacy," notes Summons. "The turnaround of the former Brooks Eckerd stores continues."

In late September Rite Aid expanded its prescription savings program chainwide. The free Rite Aid RX Savings Card provides a discount of at least 20% on more than 10,000 prescription drugs and a 10 % price cut on more than 3,200 Rite Aid brand products, including more than 1,500 over-the-counter medications.

"The Rite Aid RX Savings Card has been so successful in Michigan, North Carolina, South Carolina, Georgia and California that we have expanded the program nationwide," says pharmacy group vice president Bill Wolfe. "Residents in those states embraced the card and in only a few months have saved over $5 million on their prescriptions, over-the-counter medicines and Rite Aid brand items."

Benefits of the card include access to more than 400 generic medications at $8.99 for a 30-day supply and $15.99 for a 90-day supply, and a 30-day supply of select generic oral contraceptives for $19.99.