Rite Aid Still Turning It Around
Rite Aid is regaining its footing, reports the Baltimore Sun. Analysts say the new management team has done a good job of dealing with the legacy left by Martin L. Grass and other former managers. But the company still has far to go as it squares off against Walgreen Co. and CVS Corp.
Led by Chairman and CEO Robert G. Miller, the chain embarked on its recovery program by installing new managers, moving senior vice presidents from company headquarters to regional offices closer to the stores they supervise, closing unprofitable stores and negotiating with lenders for more breathing room.
Since arriving in December 1999, Mr. Miller has been shoring up Rite Aid’s balance sheet through the billion-dollar sale of its pharmacy benefits subsidiary and refinancing maneuvers that have pared its debt from almost seven billion dollars to four billion.
Sales have grown steadily, from $11.4 billion in fiscal 1998 to $15.2 billion in fiscal 2002, which ended March 2. In the 2002 fiscal year, Rite Aid slashed its annual loss nearly in half from fiscal 2001 — to $828 million from $1.6 billion. In the first quarter this fiscal year, it posted its first profit in five years — $2.6 million — as a result of asset sales and a tax benefit.
Moderator Comment: What is the greatest challenge to a Rite-Aid turnaround? [George
Anderson – Moderator]