Drug chain couldn't find buyer for stores

Phar-Mor is closing most of the East Coast stores it acquired two years ago.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- Phar-Mor tried but failed to find companies that wanted to buy a large group of the 65 stores that it intends to close.
John Ficarro, Phar-Mor senior vice president, said there was some interest in buying groups of stores but no deals were reached.
He said he couldn't say for sure why other companies didn't complete any deals but perhaps it was because the sale process had to move quickly.
Bankruptcy: Phar-Mor filed for protection from creditors in U.S. Bankruptcy Court Sept. 24 and filed a motion with the court Tuesday that seeks permission to close 65 of it 139 stores. Ficarro said there is a "small likelihood" that some of the stores still could be sold as ongoing operations.
Two partnerships of various investment groups have submitted bids to buy the merchandise at the stores to be closed. A hearing will be held later on the merchandise sale.
Phar-Mor's New Castle store is the only store in the Mahoning and Shenango valleys that is on the closing list. Phar-Mor has eight other stores in the area.
Of the 74 stores that will remain open, 67 are in Ohio, Pennsylvania, Virginia and North Carolina.
Restructuring: Phar-Mor has said it intends to restructure the company and bring the company back to profitability by operating these stores.
While Phar-Mor is closing a store in Alabama, two in Georgia and four in Florida, it is keeping a store in Sarasota, Fla. Ficarro said the store's profits outweigh the fact that the store would be far away from other Phar-Mor locations.
Phar-Mor cited the geographic diversity of its stores as one reason for its financial troubles.
Phar-Mor operates in 24 states but that would be reduced to eight with the proposed closings. Other stores being kept are in West Virginia, Illinois and Indiana. Among the far-away stores to be closed are two in Colorado and one each in Oklahoma, Missouri, Kentucky and Kansas.
All of Phar-Mor's health and beauty aids and grocery products are distributed from its Tamco distribution center in Austintown. About 70 of Tamco's 350 workers were laid off last week.
More than 20 of the stores to be closed were acquired in 1999 when Phar-Mor bought Pharmhouse, a struggling drugstore chain based in New Jersey. The chain operated 32 stores in eight East Coast states. Phar-Mor bought the chain for $8.45 million in cash and assumed about $26 million in debt.
Most to close: The chain had lost money for three consecutive years before the acquisition. Ficarro said most of the Pharmhouse stores are being closed because they weren't doing well under Phar-Mor's ownership either. Some, however, are doing well and are to be kept open, he said.
Ficarro said he didn't know when, or if, Phar-Mor stock would begin trading again. Nasdaq suspended trading on the morning of Phar-Mor's bankruptcy filing. The stock last traded at 56 cents a share.
shilling@vindy.com