Rite Aid Corp. said that Heyward Donigan, a digital health executive with little retail background, will be the pharmacy chain’s next CEO.
Donigan, 58, will succeed Chief Executive Officer John Standley, 56, who the company announced in March was leaving. Rite Aid has struggled with a falling stock price and questions about its future after selling about half of its stores to rival Walgreens Boots Alliance Inc. last year.
Donigan most recently served as CEO of Sapphire Digital, which sells services to help steer people toward health-care providers who offer lower costs and good quality, and helps employers and health plans manage patients who need complex procedures.
“Today’s announcement is an important step in positioning Rite Aid for the future, and we are confident that Heyward is the right person to lead the company,” said Bruce Bodaken, the chairman of Camp Hill, Pennsylvania-based Rite Aid’s board, in a statement.
Rite Aid is the smallest of the big major U.S. drugstore chains, all of which are facing challenges from digital competitors like Amazon.com Inc. that crave not only their retail customers, but increasingly also a piece of the back-of-the-story pharmacy business. Amazon and Rite Aid already have a partnership through which customers can pick up packages at some Rite Aid stores.
“Today’s announcement is another illustration of the challenges that retail pharmacy is facing as Rite Aid has moved from a CEO with a retail background to one with experience in managed care/providers,” said Ross Muken, an analyst with Evercore ISI.
The drugstore chain’s shares have lost almost half their value this year so far, and are down 96% since a 2015 all-time high.