DJ Rite Aid Names New CEO -- Update Dow Jones News4:30 PM Eastern Daylight Time Aug 12, 2019 By Heather Haddon Rite 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 that was previously known as Vitals. When she took the helm of Rite Aid on Monday, Ms. Donigan became one of 33 women leading the largest 500 U.S. publicly traded companies by revenue, according to corporate-research firm Equilar. 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 more than 50% this year.
"I recognized the opportunity to really revitalize Rite Aid," Ms. Donigan said in an interview.
Shares closed down 2.4% at $7.02 on Monday.
Other pharmacy operators have also struggled as consumers buy more household products online and amid falling prescription revenue as more Americans turn to generic drugs and benefit managers squeeze reimbursements.
Walgreens Boots Alliance Inc., 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 Corp., 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 that Chief Executive John Standley would step down and that 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 Amazon.com Inc. 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 her time at Sapphire Digital, Ms. Donigan was the chief executive at behavior-health company ValueOptions. She has also worked at Cigna Corp., General Electric Co. and Blue Cross insurance affiliates.
