YOUNGSTOWN Court OKs Phar-Mor's financing

THE VINDICATOR, YOUNGSTOWN
Phar-Mor hopes its borrowing power will persuade suppliers to restock shelves.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- Phar-Mor executives are trying to repair relations with suppliers as shoppers grow frustrated with the lack of products on store shelves.
Patty Andrews, 68, of Poland, said she left Phar-Mor's Boardman store Tuesday disappointed that the cat food aisle remains depleted. She said she used to always buy her cat food there, but she hasn't been able to for weeks.
Martha Takach, 73, of North Lima, said she couldn't find several items that she was looking for, including canned pumpkin.
She said she still shops at the store because she likes the prices, especially on the orange juice and milk.
"I hope they don't go out of business," she said.
Here's the goal: Company officials say they intend to keep the Boardman store and 73 others open. They hope court action Tuesday will help them get the shelves fully stocked at these stores.
Judge William Bodoh of U.S. Bankruptcy Court in Youngstown approved financing for Phar-Mor through Fleet Retail Finance.
John Ficarro, Phar-Mor senior vice president, said the company is hoping the financing will persuade suppliers to extend normal credit terms to Phar-Mor.
Martin Seekely, chief financial officer, said Phar-Mor has credit terms with 300 of the 1,000 companies that supply it with merchandise. The remainder either are demanding cash or haven't been contacted by Phar-Mor, he said.
Phar-Mor filed for bankruptcy protection last month and is trying to reorganize its finances so it can continue operating.
The financing approved Tuesday finalizes the interim financing that Judge Bodoh approved the day the company filed for bankruptcy.
Ficarro said he thinks some suppliers were reluctant to extend credit to Phar-Mor until the financing received final approval.
Financial situation: Seekely said Phar-Mor can borrow up to $51 million under the arrangement with Fleet.
Phar-Mor had $100 million in debt when it filed for bankruptcy but has reduced that to $30 million by selling off assets, such as prescription files and merchandise at stores that are closing. Phar-Mor is closing 65 of its 139 stores. Its New Castle store is the only area store being closed.
Ficarro said executives are hoping the company emerges from bankruptcy in March.
shilling@vindy.com