Real Nice Article RITE AID FLEDGLING FLIES ON OWN
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Posted On: 01/23/2022 12:26:44 PM
Real Nice Article RITE AID FLEDGLING FLIES ON OWN
By Barbara Demick and Daniel R. Biddle and Knight-Ridder Newspapers
Chicago Tribune
•
September 04, 1989
PHILADELPHIA — When Roger Grass quit his job at Rite Aid Corp., it was as though a fledgling had flown from the nest.
Not only had Grass spent his entire career at the giant Pennsylvania drugstore chain-working his way up from a modest job as a buyer to the post of senior vice president-the company was, indeed, his family.
His father is chairman and chief executive of Rite Aid. His older brother, the president.
But Roger, 33, recalled: ''I got tired of reading Forbes magazine and seeing stories about young people on their way up. I said to myself, I am the No. 3 guy at Rite Aid. My father is No. 1. My brother is No. 2,'' he recalled. ''I wanted to run my own company.''
And that`s where things get sticky.
It just so happens that his own company is another discount drugstore chain, Price Right Discount Pharmacies Inc. While the company is based in Indiana, a state where Rite Aid has only a small presence, Grass fully intends someday to compete head-to-head with Rite Aid.
And making matters somewhat more delicate, Grass has recruited nine former Rite Aid employees-a few of them ex-vice presidents-to make up his cadre of senior management.
Grass`s defection is regarded as a sensitive subject at Rite Aid. Through a company spokeswoman, Alex Grass, the company`s chairman, has declined to comment on his son`s new venture.
''We regard it as a competitive enterprise, and . . . we do not normally comment on competitors,'' said the spokeswoman, Suzanne Mead.
Roger Grass left Rite Aid in November and started scouting possible acquisitions. He looked at various retailers-among them an auto-parts chain-but finally settled on drugstores, the business he knew best.
An opportunity came along early this year when Peoples Drug Stores of Alexandria, Va., announced it was trying to sell several divisions. Rite Aid was a suitor for the stores and ended up buying one set of Peoples stores based in Ohio.
Grass recalled thinking at the time, ''There was no way I was in a position to compete with Rite Aid.'' But Rite Aid decided to pass on another Peoples division, based in Indianapolis, and Grass plunged in.
His financial adviser, Drexel Burnham Lambert Inc., introduced him to Acadia Partners L.P., an investment group headed by Ft. Worth financier Robert M. Bass. In June, they reached an agreement to buy the Peoples division for an estimated $60 million. The sale was completed Aug. 16.
Next to Rite Aid, Grass`s company is just a piddling enterprise.
Rite Aid, based in Shiremanstown, near Harrisburg, Pa., has more stores than any other drugstore chain in the country; about 2,270 Rite Aids ring up close to $3 billion in sales each year.
The division Grass bought has 120 stores (mostly in Indiana, but also in Illinois, Iowa and Kentucky) with annual sales of $180 million. For some years the stores have not been profitable.
But Grass intends to expand the fledgling chain, using a distribution center that was acquired in the Peoples deal to supply up to 250 additional drugstores in the Midwest.
''Once we prove ourselves with our partners, we will look for other acquisitions. We didn`t come out here to run 120 stores for the rest of our lives,'' he said.
Charles Conaway, a former Rite Aid vice president who quit in April to become executive vice president of Price Right, added: ''Rite Aid is on the fringe of our territory right now. Eventually, as we expand and Rite Aid continues to expand, we will compete at some point in the future.''
Others who have defected from Rite Aid to move with Roger Grass to Indiana include: David Dalton, a former vice president and 18-year veteran of Rite Aid; Tony Montini, another ex-vice president; Carl Cain, who spent 15 years at Rite Aid, most recently as assistant vice president; and John Foster, who had been general manager of Rite Aid`s American Discount Auto Parts division.
Grass insists that he was not deliberately raiding Rite Aid`s management ranks; rather the executives left because they were offered ownership stakes in the new company and an opportunity to get in on the ground floor.
In any case, he added, ''I`m sure (Rite Aid) isn`t very happy about it . . . but everybody has the right to work where they want.''
Kimberly Walin, a retail analyst for Prudential-Bache Securities Inc. in New York, said those who have left ''were basically younger people . . . who didn`t see the . . . growth potential for themselves ahead at Rite Aid.''
Those who left maintain there is no animosity between themselves and their former employer.
''On the day I left, Alex (Grass) shook my hand and wished me luck,''
said Montini. ''I know there are no completely positive exits. There are feelings of loss on both sides. But I would like to feel I left on good terms.''
Dalton added: ''I grew up at Rite Aid. I have no problems with Rite Aid. I watched them build the largest drug chain in the United States, and I think Roger is going to do that again, and I want to be there on the ground floor.'' Roger Grass doesn`t see his falling-out with his father as the beginning of a larger family rift. ''It isn`t the dynasty some people think,'' he said. ''You have this sort of thing in any business with a father and son with strong personalities. He`s not Caspar Milquetoast, and neither am I."
By Barbara Demick and Daniel R. Biddle and Knight-Ridder Newspapers
Chicago Tribune
•
September 04, 1989
PHILADELPHIA — When Roger Grass quit his job at Rite Aid Corp., it was as though a fledgling had flown from the nest.
Not only had Grass spent his entire career at the giant Pennsylvania drugstore chain-working his way up from a modest job as a buyer to the post of senior vice president-the company was, indeed, his family.
His father is chairman and chief executive of Rite Aid. His older brother, the president.
But Roger, 33, recalled: ''I got tired of reading Forbes magazine and seeing stories about young people on their way up. I said to myself, I am the No. 3 guy at Rite Aid. My father is No. 1. My brother is No. 2,'' he recalled. ''I wanted to run my own company.''
And that`s where things get sticky.
It just so happens that his own company is another discount drugstore chain, Price Right Discount Pharmacies Inc. While the company is based in Indiana, a state where Rite Aid has only a small presence, Grass fully intends someday to compete head-to-head with Rite Aid.
And making matters somewhat more delicate, Grass has recruited nine former Rite Aid employees-a few of them ex-vice presidents-to make up his cadre of senior management.
Grass`s defection is regarded as a sensitive subject at Rite Aid. Through a company spokeswoman, Alex Grass, the company`s chairman, has declined to comment on his son`s new venture.
''We regard it as a competitive enterprise, and . . . we do not normally comment on competitors,'' said the spokeswoman, Suzanne Mead.
Roger Grass left Rite Aid in November and started scouting possible acquisitions. He looked at various retailers-among them an auto-parts chain-but finally settled on drugstores, the business he knew best.
An opportunity came along early this year when Peoples Drug Stores of Alexandria, Va., announced it was trying to sell several divisions. Rite Aid was a suitor for the stores and ended up buying one set of Peoples stores based in Ohio.
Grass recalled thinking at the time, ''There was no way I was in a position to compete with Rite Aid.'' But Rite Aid decided to pass on another Peoples division, based in Indianapolis, and Grass plunged in.
His financial adviser, Drexel Burnham Lambert Inc., introduced him to Acadia Partners L.P., an investment group headed by Ft. Worth financier Robert M. Bass. In June, they reached an agreement to buy the Peoples division for an estimated $60 million. The sale was completed Aug. 16.
Next to Rite Aid, Grass`s company is just a piddling enterprise.
Rite Aid, based in Shiremanstown, near Harrisburg, Pa., has more stores than any other drugstore chain in the country; about 2,270 Rite Aids ring up close to $3 billion in sales each year.
The division Grass bought has 120 stores (mostly in Indiana, but also in Illinois, Iowa and Kentucky) with annual sales of $180 million. For some years the stores have not been profitable.
But Grass intends to expand the fledgling chain, using a distribution center that was acquired in the Peoples deal to supply up to 250 additional drugstores in the Midwest.
''Once we prove ourselves with our partners, we will look for other acquisitions. We didn`t come out here to run 120 stores for the rest of our lives,'' he said.
Charles Conaway, a former Rite Aid vice president who quit in April to become executive vice president of Price Right, added: ''Rite Aid is on the fringe of our territory right now. Eventually, as we expand and Rite Aid continues to expand, we will compete at some point in the future.''
Others who have defected from Rite Aid to move with Roger Grass to Indiana include: David Dalton, a former vice president and 18-year veteran of Rite Aid; Tony Montini, another ex-vice president; Carl Cain, who spent 15 years at Rite Aid, most recently as assistant vice president; and John Foster, who had been general manager of Rite Aid`s American Discount Auto Parts division.
Grass insists that he was not deliberately raiding Rite Aid`s management ranks; rather the executives left because they were offered ownership stakes in the new company and an opportunity to get in on the ground floor.
In any case, he added, ''I`m sure (Rite Aid) isn`t very happy about it . . . but everybody has the right to work where they want.''
Kimberly Walin, a retail analyst for Prudential-Bache Securities Inc. in New York, said those who have left ''were basically younger people . . . who didn`t see the . . . growth potential for themselves ahead at Rite Aid.''
Those who left maintain there is no animosity between themselves and their former employer.
''On the day I left, Alex (Grass) shook my hand and wished me luck,''
said Montini. ''I know there are no completely positive exits. There are feelings of loss on both sides. But I would like to feel I left on good terms.''
Dalton added: ''I grew up at Rite Aid. I have no problems with Rite Aid. I watched them build the largest drug chain in the United States, and I think Roger is going to do that again, and I want to be there on the ground floor.'' Roger Grass doesn`t see his falling-out with his father as the beginning of a larger family rift. ''It isn`t the dynasty some people think,'' he said. ''You have this sort of thing in any business with a father and son with strong personalities. He`s not Caspar Milquetoast, and neither am I."
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