Rite Aid CEO To Leave The Drugstore Chain

Rite Aid said its chief executive officer Heyward Donigan is leaving the company, which has struggled to become profitable in her reign of more than three years.

The drugstore chain Monday said Donigan is leaving the “company as President and CEO, and as a member of the Board” and has named board member “Elizabeth “Busy” Burr, a member of the Company’s Board, as interim CEO, effective immediately.”

Donigan has been Rite Aid’s chief executive officer since August of 2019. In a statement, Donigan said she was “proud of all that we have achieved together” and believed “that the Company is well positioned for the future.”

Rite Aid board Chairman Bruce Bodaken said the board and Donigan agreed “ that now is the right time to identify the next leader of the business.”

“With a deep understanding of the industry and our strategy, the Board was unanimous in its belief that Busy is highly qualified to serve as interim CEO while the Board conducts a search for a permanent successor,” Bodoaken said. “We are fortunate to have someone of her caliber to step into the role and are confident in Busy’s ability to lead the Company forward during this transition period.”

The decision to tap a new CEO comes as Rite Aid has struggled to compete with larger rivals CVS Health, Walgreens and Walmart and has been unable to turn a profit despite closing dozens of stores.

Rite Aid, which has already been closing 145 unprofitable stores for the last year, may close even more underperforming locations, executives disclosed in December when it reported a quarterly loss of more than $67 million, and is now projecting greater losses for its fiscal 2023 than it projected just three months earlier.

Rite Aid, which has struggled in recent years to compete with larger rivals Walgreens, CVS Health and Walmart pharmacies, in April said it planned to “significantly reduce costs” through a “closure of a total of 145 unprofitable stores.” The number includes the 63 stores the company already announced in December it would close.

Rite Aid Monday reaffirmed fiscal year 2023 guidance that projects a “net loss between $584 million and $551 million, Adjusted EBITDA between $410 million and $440 million and capital expenditures of approximately $225 million.”

The new interim CEO Burr is the former President and Chief Commercial Officer at Carrot Inc., a digital health care company.

“Having served as a Director since 2019, I have great respect for the important role Rite Aid plays as a full-service pharmacy improving health outcomes for millions of Americans,” Burr said in a statement. “I will work with the Board and management team to realize our vast potential while supporting our thousands of pharmacists and team members who are focused every day on meeting the needs of our communities and customers. With Rite Aid’s well-established brand and its committed and talented team, I look forward to delivering on our business strategy and driving value for all our stakeholders.”