Rite Aid stock gains after chain announces CEO change, cost-cutting reorg

Shares of Rite Aid Corp. rose 3% in the extended session Tuesday after the drugstore chain said that Chief Executive John Standley and other top executives are leaving the company amid a restructuring aimed at cutting costs. Rite Aid will "reduce managerial layers and consolidate roles across the organization," eliminating about 400 full-time positions, or more than 20% of the corporate jobs at its headquarters in Pennsylvania and across the company. About two-thirds of the layoffs will take place immediately, with the rest taking place by the end of fiscal 2020, Rite Aid said. The company hopes to reach annual cost savings of around $55 million with the reorganization, of which about $42 million will be realized within fiscal year 2020, it said. Rite Aid expects a one-time restructuring charge of approximately $38 million to achieve the hoped-for savings. In addition to Standley, Chief Operating Officer Kermit Crawford, Chief Financial Officer Darren Kast, and Executive Vice President Derek Griffith are leaving the company. Standley will stay on the job until a successor is appointed, Rite Aid said. "These are difficult decisions and we recognize the implications they have for individuals across our organization. However, it is imperative we take action to reduce the cost of current operations and become a more efficient and profitable company," board chairman Bruce Bodaken said in a statement. Shares of Rite Aid ended the regular session down 2%.

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