This monumental shake-up, which is anticipated to be complete by the end of fiscal 2020, will save the company some $55 million each year, Rite Aid said on Tuesday. About $42 million will be realized within fiscal year 2020, as two-thirds of the reductions are effective immediately.
The moves are drastic (and will entail a one-time restructuring charge of about $38 million, the company said) and reflect Rite Aid’s smaller footprint after it sold stores to Walgreens and closed others. The resulting savings will help “offset an expected reduction in income associated with its diminishing obligations under the Transition Services Agreement with Walgreen Co.,” related to Rite Aid’s sale of some 2,000 stores to its rival after the two failed to merge in 2017.
