Collapse of Phar-Mor bad news for Valley

Of all the recent news stories dealing with the expected dismantling of the Phar-Mor Inc. chain, the one that caused us to think of what might have been appeared on the front page of Tuesday's Vindicator. The story was based on comments from retail industry experts about Phar-Mor's proposal to sell its remaining 73 stores and Austintown warehouse because of mounting losses.
David Burns, business professor at Youngstown State University, discussed the difficulty the Youngstown-based deep discount chain had in competing with such retail giants as Wal-Mart. But it was Burns' recollection of Phar-Mor's position in the industry 10 years ago that struck a chord. The professor noted that the future of the chain seemed much brighter then and to prove his point revealed that Sam Walton, founder of Wal-Mart, surprised the retail industry when he said Phar-Mor was the company that worried him the most.
If only Michael I. Monus, former president and chief executive officer, had not lost sight of the goals he had set for the company and for the Mahoning Valley when he made "Power Buying" a household label nationally. With more than 300 stores and 25,000 employees around the country, Phar-Mor was in the big leagues. And the Valley benefited greatly. With the corporate headquarters in downtown Youngstown in the building that once housed the Strouss department store, high-paying jobs provided a major boost to the local economy.
But then Monus was convicted of fraud and embezzlement -- he is serving a 20-year sentence in federal prison -- and the chain that he built began to collapse. The company filed for Chapter 11 bankruptcy protection in August 1992, but the winning formula that Monus developed was never replicated.
Bitter truth
Last year, we expressed the hope that Phar-Mor would be able to emerge from financial reorganization as a strong, regional chain of discount stores. Last week, the Valley was forced to face the bitter truth: the end of Phar-Mor headquartered in Youngstown is imminent.
And that prompts the following question: Is there a way to prevent the loss of jobs in the Valley? There isn't a clear answer because several companies are in a bidding war in bankruptcy court to take over the stores and the distribution center in Austintown. Judge William T. Bodoh, who has presided over numerous hearings relating to Phar-Mor, knows what is at stake, not only for the creditors and the company, but also for the region.
We are heartened by the comments of Bill White, chief financial officer of Snyder's Drug Stores of Minnesota, that more jobs are possible at the Tamco distribution center if it is successful in buying much of Phar-Mor. There are 250 hourly employees at Tamco, which serves 73 Phar-Mor stores. Snyder's would use the center to serve about 300 stores and perhaps more as the drugstore company expands.
While we are well aware that the interests of the creditors are paramount in any bankruptcy proceeding, the effects of a company's demise on a community cannot be ignored.
When Monus launched Phar-Mor, he received a lot of help from local governments, development groups and the state of Ohio. It is, therefore, not unreasonable for this region to expect some consideration from the successful bidder for Phar-Mor.