Dive Brief:
- Justin Mennen, Rite Aid's executive vice president and chief digital and technology officer, has left the company. Mennen was terminated on July 28, according to a securities filing.
- The company recently named two people to new leadership roles. Christine Rose has been promoted to senior vice president and chief information officer, and will oversee technology.
- And in another executive change, Rite Aid announced Monday that Jeanniey Walden is the company’s new senior vice president and chief marketing officer. Walden, who has held the position on an interim basis since March, will oversee the digital part of the business.
Dive Insight:
Rite Aid announced Mennen was joining the company as its senior vice president and chief information officer in late 2018. At that time, the retailer said it was looking to Mennen to modernize its infrastructure and improve the customer and associate experience.
Under the terms of a separation agreement, Rite Aid agreed to pay Mennen $900,000 for waiving his rights to severance benefits under his employment agreement. However, Mennen retained his rights to a $750,000 retention incentive payment. According to information in a July 11 SEC filing, the company disbursed the retention bonus on or about May 12.
Rose has been with Rite Aid for just over three years. She first joined the company as senior vice president for enterprise technology solutions. Before joining Rite Aid, Rose was in a variety of information technology leadership positions, including at Ross Stores, where she was senior director of IT production services, according to her LinkedIn profile.
Walden, Rite Aid’s new chief marketer, has decades of retail experience. Before joining Rite Aid, she was chief innovation and marketing officer at DailyPay. In that role, she worked closely with large grocery and retail brands like Target, Dollar Tree and Kroger, overseeing strategies to improve the omnichannel customer journey. Walden also has experience with enterprise transformation and developing customer-driven solutions through roles at Barnes & Noble and J.C. Penney.
“As an accomplished marketer with a customer-centric approach, Jeanniey will lead the charge to strengthen and enhance the ways we conveniently meet our customers’ changing needs, helping us further our mission to provide whole health for life,” Rite Aid interim CEO Busy Burr said.
The retail and pharmacy company has experienced several recent leadership changes. Heyward Donigan, who had been CEO since 2019, left the company in January. Burr was named the interim CEO at that time.
Chief Legal Officer and Secretary Paul Gilbert submitted his resignation in March “to pursue other opportunities.” Then, in April, Rite Aid disclosed in a securities filing that it intended to pay a $1.5 million bonus to retain Chief Financial Officer Matthew Schroeder through April 2024.
Rite Aid reported revenue fell last quarter to $5.7 billion from $6 billion year over year. The company attributed the decline to a reduction in Rite Aid’s prescription drug plan membership and the loss of commercial clients at subsidiary Elixir, the retailer’s wholly-owned pharmacy benefits business.
The company also reported a nearly $307 million net loss last quarter, up from $110 million from last year and adjusted EBITDA of about $91.7 million, down from about $100 million the previous year.
“To help mitigate this, we are making targeted reductions to SG&A and capital expenditures over the remainder of the year,” Burr said in a June 29 earnings announcement. “Importantly, we made good progress on turnaround initiatives across key areas of the business, and we continue to believe we are on track to achieve Adjusted EBITDA growth in fiscal years 2025 and 2026.”
Rite Aid said it lowered its guidance based on recent business trends. The company now forecasts that its adjusted EBITDA will range from $90 million to $100 million due to higher drug costs and a higher medical loss ratio at Elixir Insurance. That’s $10 million lower than previously forecast. However, Rite Aid said its retail pharmacy segment adjusted EBITDA is unchanged and will still range from $240 million to $260 million as “a result of tougher front-end sales trends balanced with cost savings.”
The company also expects a net loss ranging from about $650 million to $680 million.
In October, CreditRiskMonitor’s FRISK score indicated that Rite Aid had a 9.99% to a 50% chance of filing for bankruptcy in the next 12 months, Retail Dive previously reported.
