Rite Aid Names Heyward Donigan as CEO



RAD -2.84%

Aid Corp. appointed Heyward Donigan as chief executive, saying her experience leading health-care companies would help the pharmacy chain confront competition that has hurt sales and prompted job cuts.

Ms. Donigan, 58 years old, was chief executive of Sapphire Digital, a website for analyzing health-care plans previously known as Vitals. When she takes the helm of Rite Aid Monday, Ms. Donigan will be one of about 34 women leading Fortune 500 companies. Pennsylvania-based Rite Aid, the third-largest U.S. pharmacy chain with 2,466 stores in 18 states, has seen its market share decline and its shares plunge 49% this year.

“I recognized the opportunity to really revitalize Rite Aid,” Ms. Donigan said in an interview.

Other pharmacy operators have also struggled as consumers buy more household products online and prescription revenue falls as more Americans turn to generic drugs and benefit managers squeeze reimbursements.

Walgreens Boots Alliance

the biggest U.S. drugstore chain, said last week it would close 200 of its more than 10,000 domestic stores as part of wider cost cuts.

CVS Health

, though, posted unexpectedly strong financial results last week mostly due to its acquisition of insurer Aetna Inc.

After regulators blocked a proposed merger between Walgreens and Rite Aid in 2017, Rite Aid sold more than 2,000 stores to Walgreens, boosting its cash position but leaving it with less scale to compete.

Last year, Rite Aid sought to merge with grocery chain Albertsons Cos. Some shareholders opposed the roughly $24 billion deal, and the companies dropped it last August. After the deal collapsed, Rite Aid said in March Chief Executive John Standley would step down and it would cut 400 corporate jobs, more than one-fifth of its total.

Ms. Donigan said she would look for ways to make Rite Aid more efficient but hopes to avoid further job cuts.

“It’s not just taking a hammer to the business,” she said.

Rite Aid needs to work on online ordering and prescription delivery, but customers still will want to visit drugstores and the chain has a strong brand in the areas where it is located, Ms. Donigan said. The company struck a deal with


in June to allow customers to pick up online orders at Rite Aid stores, and Ms. Donigan said she hoped to find more such incentives to persuade customers to visit.

“I have a strong point of view that pharmacies will continue to be physical,” she said.

Before Sapphire Digital, Ms. Donigan was the chief executive at behavior-health company ValueOptions. She has also worked at



General Electric

and Blue Cross insurance affiliates.

Write to Heather Haddon at heather.haddon@wsj.com

Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Source link


Please enter your comment!
Please enter your name here