Rite Aid Corporation: An Uncertain Future
Rite Aid Corporation (Rite Aid) shareholders had turned down a US$3 million bonus proposed for the chief executive officer (CEO) and elected a new board chair. Under the CEO's leadership, Rite Aid had paid off some debt and returned to modest profitability. However, two failed plans to sell the business had shaken the shareholders' confidence. Having dealt with falling sales, shrinking profits, the sale of over half of its stores, and the news that Amazon.com Inc. had acquired an online pharmacy, Rite Aid was facing challenges from all sides. The drugstore industry was in turmoil, and without a buyer, the board chair needed to revisit the company's strategy and its management's capabilities. In the face of consolidation, vertical integration, and disruption from new entrants, survival was uncertain. Could Rite Aid survive on its own? Would it be feasible to attempt a third merger agreement, or were more radical options needed?