By now, Rite Aid Corp. chief executive Martin Grass seems like a man who could use a bottle of aspirin from his store shelves.

Once hailed for building Rite Aid into a leading drugstore chain, Grass is now under fire from investors challenging the credibility of the company's financial reports and by some suppliers protesting their treatment by the retailer. Months of turmoil have battered the firm's stock price.

The troubles at the nation's No. 3 drugstore chain began with an expansion spurt that left the company bloated with debt and stuck with some underperforming West Coast outlets.

The Camp Hill, Pa., company also has unnerved investors and suppliers by restating its annual earnings, announcing its chief financial officer's resignation and delaying until this week an explanation of how it would deal with a $1.3 billion line of credit that is to expire later this month.

The headaches don't end there. Rite Aid has been sued by Florida authorities accusing the retailer of prescription overcharges.

As the bad news piled up, the retailer's stock tanked to a low of $11 late last month from a high of $50.93 3/4 in January. On Friday, Rite Aid shares fell 18 3/4 cents to close at $13.62 1/2 on the New York Stock Exchange.

Grass told analysts in a conference call Wednesday that the problems would be remedied and that the company would meet all its obligations.

The assurances may come too late for some critics.

"It goes back to management," said Robert Izmirlian, an analyst with the S&P Equity Group in New York. "When you start to see a series of these things, you start to ask, 'What will it take to get investors back into the stock?' To me, it will take a change in management."

Other industry observers say Wall Street has overreacted to bad news about Rite Aid in part because Grass and other executives haven't shared enough information about their plans.

"When your stocks and bonds are trading up, that's not an issue," said Jon Cartwright, an analyst with the investment firm Raymond James. "When they start trading down, it becomes a major issue. . . . I don't believe it's necessary for [Grass] to go away for this to get better. I do believe it's necessary for him to become more accessible."

When his father, Alex Grass, was at the helm, Rite Aid was a much different company. Opening his first store in 1962 in Scranton, Pa., the elder Grass kept a conservative, cost-conscious control on operations.

But Martin Grass had bigger ambitions. After succeeding his father in 1995, the younger Grass began aggressively expanding the company. Although federal regulators blocked his proposed acquisition of Revco, he picked up smaller drugstore chains such as Thrifty PayLess in Oregon and stepped up construction of new Rite Aid stores. Earlier this year, Rite Aid paid $1.5 billion for the pharmacy benefits manager PCS Health Systems.

Wall Street cheered Grass's moves at first, sending Rite Aid's stock soaring last year. Annual revenue has more than doubled over the past five years, to $12.7 billion.

But Rite Aid's share price began sliding in March after questions were raised about the company's financial controls. In June the company restated its fiscal 1999 profits, lowering them by about 9 percent to $143.7 million. The retailer also disclosed that $35 million of its fourth-quarter 1999 pretax profit of $82.7 million stemmed from the settlement of two lawsuits against manufacturers, not from operations.

The changes to Rite Aid's fiscal 1999 earnings were prompted by questions from the retailer's independent auditor. Rite Aid also made smaller adjustments to its fiscal 1998 and 1997 earnings after a review by the Securities and Exchange Commission.

Following the restatements, the company's chief financial officer, Frank Bergonzi, stepped down.

In the meantime, several big suppliers, including Bayer AG, complained that Rite Aid had subtracted larger-than-normal sums from their bills. Although such deductions are common in the retail industry and are used to account for outdated or damaged merchandise, Rite Aid provided little explanation for its actions, according to suppliers and consultants.

The size of the deductions led some suppliers and industry observers to question whether Rite Aid had tried to inflate year-end results.

The company has since settled bills with many of its larger suppliers.

"A lot of people got on planes or got in their cars," said Tom Corbett of Creditek, a New Jersey consultant to suppliers. "If you had the logs, I think you'd see that a lot of people have visited Rite Aid in the past few months."

AkPharma Inc., a Pleasantville, N.J., company that makes digestive supplements that reduce acids in foods, filed a lawsuit against Rite Aid last month seeking $44,000 in repayments. In the court papers, it alleges that Rite Aid took improper discounts, including deductions for advertisements that never ran.

"No one has ever done anything like this, and certainly not Walgreens," said Alan Kligerman, AkPharma's chief executive. "We finally got brains in our heads and said we're not going to ship to them anymore."

Suppliers interviewed this week had mixed reactions to Rite Aid's deductions. Larger manufacturers such as Bayer, Dial Corp. and Procter & Gamble Co., declined to comment. Some smaller suppliers said Rite Aid's deductions have long been out of line, but others indicated that they have never had problems with the retailer.

Some manufacturers said they were watching Rite Aid more closely, however.

"I'd have to agree that people are being more cautious," said Bill Seiden, senior vice president of marketing and sales for Taro Pharmaceuticals in Hawthorne, N.Y. "That's true of any company that goes on a buying spree or extends themselves as far as Rite Aid has."

Rite Aid also needs to deal with a suit filed last month by Florida's attorney general's office accusing the retailer of overcharging tens of thousands of customers without health coverage. Rite Aid issued a statement denying the charges, saying "not one customer was deceived or defrauded."

Most industry observers agree that Rite Aid's financial problems can be cured. Sales at most of the chain's 3,900 stores are healthy, and the pharmaceutical industry is booming thanks to longer lifespans and a large pool of aging Americans.

In recent weeks, Rite Aid also has taken several steps to restore confidence in its financial condition. It said it will eliminate 330 jobs at its headquarters and regional offices--a move that is expected to bring an annual pretax savings of $31.5 million.

In Wednesday's much-awaited conference call with analysts, Grass said lenders have promised that a $1.3 billion credit line expiring Oct. 29 would be extended until the spring.

Grass also suggested that Rite Aid may be looking to sell part of its PCS Health Systems division and more than 200 West Coast stores to reduce the company's debt.

Rite Aid's purchase of PCS earlier this year increased the company's debt to about $5 billion from $3.6 billion a year ago. Grass said his company has received "unsolicited offers" for PCS.

"My goal in the near future is to de-leverage the company and focus on cash generation going forward," he said.

Rite Aid's agreement in 1995 to acquire Revco was derailed by the feds a year later, but Rite Aid carries on. In 1996 and 1997, it acquires seven companies, including Thrifty PayLess. By the end of 1997, it has added about 1,400 stores in two years, and its stock price has risen 72 percent.

1998: Rite Aid closes many of its smaller stores; in late 1998 it agrees to buy PCS Health Systems from Eli Lilly; stock rises 69 percent that year.

March 12, 1999: Stock plummets when analysts raise questions about the company's financial controls.

Yesterday:

Lawsuits, unfavorable financial state-ments and other troubles have helped pull down Rite Aid stock 72 percent this year.

SOURCES: Bloomberg News, Hoover's, Rite Aid

In Profile

Rite Aid

Business: Third-largest drugstore chain in the country, after Walgreens and CVS.

Established: 1962 in Scranton, Pa.

Based: Camp Hill, Pa.

Number of stores: About 3,900

Employees: 90,000

1999 revenue*: $12.7 billion

1999 earnings*: $143.7 million

Web address: www.riteaid.com

Yesterday's closing stock price:

$13.621/2, down 183/4 cents

*Fiscal year ended February 1999.