Sammons’ legacy is one of turnaround
When Rite Aid chairman Mary Sammons accepted the Sheldon W. Fantle Lifetime Achievement Award at the National Association of Chain Drug Stores’ Annual Meeting in Scottsdale, Ariz., in May, it was the culmination of a career that had seen Rite Aid emerge from a period of darkness that had lasted more than a decade.
Sammons plans to stay on as chairman of Camp Hill, Pa.-based Rite Aid until the company’s annual meeting in June 2012. But when she does hang up the gloves, she will have a lot to look back on.
Sammons joined Rite Aid as president and COO in December 1999 after a career as president and CEO of Portland, Ore.-based mass merchandiser Fred Meyer, along with former Fred Meyer executives Bob Miller, David Jessick and John Standley.
At that time, Rite Aid already was in trouble. Its stock was in freefall, leading former chairman and CEO Martin Grass, the son of the company’s late founder Alexander Grass, to step down amid major fraud charges.
The chain’s West Coast operation of more than 900 stores, the result of its 1996 acquisition of the Thrifty PayLess chain, was up for sale due to poor performance compared with its East Coast stores, and by the time Sammons was on board at Rite Aid, 32 stores already had been sold to Longs Drug.
But under Sammons and former chairman and CEO Bob Miller, the West Coast stores were taken off the block. Since then, the chain has had its share of troubles, but the leadership of Sammons, Miller and Standley, the latter of whom returned to Rite Aid in 2008 after a successful turnaround of Pathmark Stores, has helped steer the company back into credibility. At press time, the company’s stock was safely above $1, and it had already started narrowing its losses thanks to rising sales and the wellness+ loyalty card program. The 2007 merger with Brooks Eckerd Pharmacy greatly increased Rite Aid’s footprint on the East Coast.
The company again came under pressure to sell off its West Coast stores in 2009. In a conference call with analysts held around the time of CVS’ takeover of the Longs Drug chain, Sammons recognized that the West Coast was an important part of Rite Aid’s business. “[The West Coast] is also a strong contributor to ... scale, our ability to really have greater capacity to buy better and do what we do and leverage expenses. We have strong market shares out there. We’ve invested a lot of dollars out there ... frankly,” she said.
That thinking paid off: The company recently remodeled one of its stores in Newport Beach, Calif., with its new wellness store format, the first of its kind outside the Northeast. At press time, the wellness stores were trending at between 100 and 200 basis points better than the rest of the stores in the chain.
Under Sammons’ leadership, Rite Aid regained its footing and has already embarked on its renaissance. She’ll have a lot to be proud of next June.