Sammons, Mary F. 1946–
Mary F. Sammons
President and chief executive officer, Rite Aid Corporation
Born: October 12, 1946, in Portland, Oregon.
Education: Marylhurst College, BS, 1970.
Family: Daughter of Lee W. and Ann (Cherry) Jackson; married Nickolas F. Sammons, September 12, 1967; children: one.
Career: Fred Meyer, 1973–1975, management trainee; 1975–1980, buyer; 1980–1986, vice president, merchandising; 1986–1997, senior vice president and manager of soft goods division; 1997–1998, executive vice president, Apparel, Home Electronics, and Home Group; 1998–1999, president and chief executive officer of Fred Meyer Stores; Rite Aid Corporation, 1999–2003, president and chief operating officer; 2003–, president and chief executive officer.
Awards: Named Woman of Achievement, YWCA, Portland, Oregon, 1987; named 2001 Chain Drug Retailer of the Year by Chain Drug Review magazine; named one of America's 50 most powerful women in business by Fortune magazine, 2003.
Address: Rite Aid Corporation, 30 Hunter Lane, Camp Hill, Pennsylvania 17011; http://www.riteaid.com.
■ Mary Sammons came to Rite Aid Corporation as its new president and chief operating officer in 1999, a time when the Pennsylvania-based drugstore chain was teetering on the edge of bankruptcy. Part of an infusion of new management blood recruited from Fred Meyer shortly after the latter's acquisition by Kroger Company, Sammons in less than five years helped to steer the company back to profitability. After years of unbroken losing quarters, in early 2004 Rite Aid posted a profit of $73.6 million on total revenue of $4.11 billion for the third quarter of fiscal 2004, which ended November 29, 2003. These figures were up from a net loss of $16.4 million on sales of $3.87 billion a year earlier.
Sammons was widely recognized for the pivotal role she played in engineering the turnaround at Rite Aid. In early
2002 Chain Drug Review named Sammons Chain Drug Retailer of the Year for 2001, citing her role in a "dramatic metamorphosis" that had rescued Rite Aid from the brink of extinction and transformed it into a drug chain "within sight of its objective of competing on equal footing with the best drug chains in America" (January 7, 2002). Also lavish in its praise of Sammons's accomplishments was Fortune, which in October 2003 named her to its list of the 50 most powerful women in American business. Noting that Rite Aid "was a basket case when Sammons arrived in late 1999," Fortune cited the new president's contribution to the drugstore chain's recovery in the closure of more than 400 underperforming stores and the rebuilding of Rite Aid's relationships with its vendors.
LAID OUT SHORT-TERM STRATEGY
To continue Rite Aid's return to solid profitability, Sammons in late 2003 laid out her short-term strategy for the company. According to Chain Drug Review (October 27, 2003), Sammons said that Rite Aid would focus on four key priorities: (1) growing pharmacy script counts, (2) achieving front-end sales growth, (3) controlling expenses, and (4) improving customer service. Another focus of Sammons's campaign to rebuild Rite Aid was to improve the morale of the drug chain's associates by involving them more deeply in the formulation of company policy. When Sammons took over as president in 1999, she found that previous management had badly neglected this important resource. As she told Chain Drug Review, "Our people had been trampled. They were worried about their futures and uncertain about what was going to happen to the company" (December 10, 2001).
Sammons, the daughter of Lee W. and Ann (Cherry) Jackson, was born in Portland, Oregon. After finishing high school in Portland, she enrolled at nearby Marylhurst College, where in 1970 she earned a bachelor's degree in French as well as a secondary-level teaching certificate. At the beginning of her sophomore year at Marylhurst, Sammons married Nickolas F. Sammons. In 1973, after a brief career in teaching, Sammons entered the management training program at Portland-based Fred Meyer, a major food, drug, and general merchandise retailer in the western United States.
For more than a quarter century, Sammons worked for Fred Meyer, leaving only after the Oregon-based retailer was taken over in 1999 by the Ohio-based Kroger Company. After finishing her management training program in 1975, Sammons began work as a buyer for Fred Meyer, a position she held until 1980, when she was named vice president for merchandising. In 1986 she was promoted to senior vice president and named manager of the company's soft goods division. In 1997 Sammons was appointed executive vice president and assigned the responsibility for managing the company's Apparel, Home Electronics, and Home Group. A year later she was promoted to president and chief executive officer of Fred Meyer Stores, the Meyer subsidiary that operates the chain's large one-stop shopping centers.
LEFT FRED MEYER AFTER KROGER ACQUISITION
In late 1998 Kroger Company, America's largest supermarket chain, reached an agreement with the board of Fred Meyer to acquire Meyer for $13 billion in stock and assumed debt. Less than seven months after the acquisition was finalized in late May 1999, Sammons, along with fellow Fred Meyer executives Robert G. Miller, David Jessick, and John Standley, left the newly merged company to help save the foundering Rite Aid from bankruptcy. Sammons joined Rite Aid as president and chief operating officer while Miller took over as the drugstore chain's chairman and CEO. Jessick, formerly the executive vice president of finance and investor relations at Fred Meyer, joined Rite Aid as chief administrative officer, and Standley took over as chief financial officer, the same post he had held at Fred Meyer.
When Sammons and the rest of the new management team took over at Rite Aid in December 1999, the drugstore chain was in total disarray. Martin L. Grass, the son of the company's founder, had resigned in October 1999 as chairman and CEO amid growing accounting and legal problems. Rite Aid's board, led by four of its seven independent directors, renegotiated loan payment schedules to give the company an extra year to repay $3.3 billion in debts, originally due at the end of October. The Los Angeles-based investment banker Leonard Green & Partners contributed $300 million to Rite Aid's dwindling coffers, giving the company a minority stake in the chain. In mid-November 1999 KPMG, Rite Aid's longtime auditor, severed its relationship with the drug chain because it claimed it could no longer trust the company's top managers accurately to portray Rite Aid's financial status. On the heels of KPMG's announcement, the Securities and Exchange Commission launched a formal investigation into Rite Aid's accounting practices.
HELPED TO CREATE NEW CORPORATE CULTURE
One of Sammons's priorities in putting Rite Aid on the road to financial recovery was the creation of a new corporate culture at the drugstore chain. Under her direction, the company's new management slowly opened new lines of communication with employees at all levels of the chain. Sammons quickly discovered that most of Rite Aid's employees had been all too aware of the company's problems under its previous management but had been rebuffed whenever they offered suggestions for change. Sammons worked hard to turn around morale, trying to convince all employees that their input was important and essential if Rite Aid were to recover and prosper once again. As she told Chain Drug Review (December 10, 2001), "There are a lot of great people here. And people bond very quickly when they're working together to overcome obstacles. It's exciting to see progress being made" and see how that progress is reflected in improved employee morale.
As Miller and the rest of the new management team focused on the critical issues of refinancing and the creation of a reliable financial reporting system, Sammons shouldered the responsibility for getting Rite Aid's core drugstore business back on track and growing once again. To strengthen the operations of retail outlets throughout the chain, Sammons worked with vendors to ensure a reliable flow of inventory to stores. To recapture some of the business lost during the height of Rite Aid's financial management crisis, she created pharmacy advisory panels. These panels, made up of company pharmacists and pharmacy managers, according to MMR magazine (August 20, 2001), came up with valuable ideas for improving work flow and customer service as well as innovative pricing initiatives.
REVIVED RITE AID
Sammons also revived Rite Aid's advertising circular and put greater emphasis on customer service. Greater investment in technology helped to hasten the chain's progress on the latter front, with robotics increasing the speed with which prescriptions could be filled and voice messaging systems giving customers a way to order refills easily and select pickup times. The payoff for these improvements was quickly reflected in higher customer counts and prescription counts.
For the first full fiscal year of operations under the new management team, Rite Aid reported a net loss of nearly $1.6 billion on sales of $14.5 billion. In fiscal 2002, which ended February 28, 2002, the company's net loss had been cut almost in half. Rite Aid reported a fiscal 2002 net loss of $828 million on revenue of almost $15.2 billion. A year later the company's net loss had been significantly reduced to only $112.1 million on total sales of $15.8 billion.
In April 2003 Rite Aid chairman Miller passed on his CEO responsibilities to Sammons, whom he said he had decided early on to recommend as his successor. Sammons, along with Miller and the rest of the new management team at Rite Aid, took control of the company at the end of 1999, when most observers felt a Chapter 11 bankruptcy filing was inevitable. Under their direction the company not only avoided bankruptcy but also managed to reinvigorate sales and significantly improve operating results. Of Sammons's contribution to Rite Aid's dramatic turnaround, Miller said, "Since we arrived Mary has had responsibility for running the business day to day and leading the change to a new corporate culture," according to MMR (January 12, 2004).
WORKED TO BUILD UP PHARMACY BUSINESS
To help Rite Aid build up its pharmacy business, which accounts for roughly 63 percent of total revenue, Sammons took a series of steps to beef up and streamline the chain's pharmacy operations. By late summer 2003 Rite Aid had introduced eprescribing into 16 of its markets and announced its intention eventually to bring that capability to all of its stores. To expedite the expansion of e-prescription capability throughout the chain, Rite Aid established relationships with ProxyMed and SureScripts. Another key component of the company's campaign to increase its pharmacy base was to purchase prescription files from independent drugstores. The chain nearly doubled its budget for prescription file purchases during fiscal 2004. Rite Aid also moved aggressively to capture more of the senior market by test marketing a senior loyalty card that lets older customers earn back 15 percent of their prescription cost as a credit toward a future purchase.
In May 2003 Sammons, already the highest-ranking woman executive in the chain drug industry, became the first female ever to serve as chairman of the industry's National Association of Chain Drug Stores (NACDS) for a year. At NACDS's Pharmacy and Technology Conference in August 2003, she urged all association members to work together to elevate the role of the pharmacist. According to Drug Store News, Sammons emphasized the central role of the pharmacy in the operation of all drugstore chains. "Simply put, we as an industry cannot honestly talk about the value of pharmacy unless we deliver for our pharmacists by giving them meaningful involvement in business decisions" (September 22, 2003).
Sammons and her husband, Nickolas, lived in a home not far from Rite Aid's headquarters in Camp Hill, Pennsylvania. In addition to her responsibilities at Rite Aid and NACDS, Sammons also served as a member of the board of governors of the Children's Miracle Network.
See also entries on Fred Meyer, Inc. and Rite Aid Corporation in International Directory of Company Histories.
sources for further information
Belden, Tom, "Rite Aid's New CEO Aims for Healing from Ground Up," Philadelphia Inquirer, August 24, 2003.
Dochat, Tom, "Camp Hill-Based Rite Aid Demotes Its Finance Chief," Harrisburg Patriot-News, January 10, 2004.
——, "Rite Aid Executive Receives Payment from Kroger," Harrisburg Patriot-News, January 13, 2004.
Ferraro, Cathleen, "Rite Aid Names New Chief Executive in Turn-Around Effort," Sacramento Bee, December 8, 1999.
"Fortune Cites Sammons," Chain Drug Review, October 13, 2003.
"Four Initiatives Will Take Chain to New Level," Chain Drug Review, October 27, 2003.
Johnsen, Michael, "File Acquisition Lays Foundation for Solid Growth," Drug Store News, August 18, 2003.
——, "On Steadier Ground, Rite Aid Sets New Goals," Drug Store News, July 21, 2003.
Johnsen, Michael, and James Frederick, "NACDS Chairman Urges Collaboration to Stress Pharmacists' Role in Patient Care," Drug Store News, September 22, 2003.
Levy, Marc, "After Scandal, Rite Aid Sees Turnaround," AP Online, April 22, 2003.
"Management Instills New Sense of Pride," Chain Drug Review, December 10, 2001.
"Miller-Sammons Partnership the Catalyst," Chain Drug Review, October 27, 2003.
"Miller Takes Helm at Rite Aid," Chain Drug Review, December 6, 1999.
Nagel, Andrea M. G., "NACDS: Against the Current," WWD, May 2, 2003.
"New Management Team Aims to Get Rite Aid Back on Track," Chain Drug Review, May 1, 2000.
Pinto, David, "CDR Names Rite Aid's Sammons Retailer of Year," Chain Drug Review, January 7, 2002.
Pressler, Margaret Webb, "Suddenly It's Right Aid: How One Chain Turned a Corner with Old-Fashioned Retail Virtues," Washington Post, September 7, 2003.
"Rite Aid Finally Gets Back into the Black," Chain Drug Review, January 19, 2004.
"Rite Aid Now Ready, Well Positioned to Compete," MMR, August 20, 2001.
"Rite Aid Succeeds in Beating the Odds," Chain Drug Review October 27, 2003.
"Sammons Finds More Ways to Grow," MMR, January 12, 2004.
"Sammons Joins Rite Aid at Critical Juncture," Chain Drug Review, September 15, 2003.
"Sammons Makes Sure That People Come First," Chain Drug Review, January 7, 2002.
Simon, Ellen, "Rite Aid Names New CEO, Prepares to Confront Multiple Crises," Newark Star-Ledger, December 6, 1999.
Sommer, Constance, "Kroger Makes Bid to Buy Fred Meyer; QFC Included in Deal Expected to Close in '99," Seattle Post-Intelligencer, October 20, 1998.
Zwiebach, Elliot, "Kroger Execs Jump Ship to Rite Aid; Stock Sinks," Supermarket News, December 13, 1999.