YOUNGSTOWN Is Phar-Mor sale near?

A sale could jeopardize Phar-Mor's downtown headquarters and its 200 jobs.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- A Minnesota drugstore chain is close to buying the Phar-Mor chain to get its distribution center in Austintown, a trade journal says.
If completed, a sale could mean the end of Phar-Mor's downtown headquarters, which employs about 200.
Drug Store News has reported that Snyder's Drug Stores is in talks to acquire the Youngstown-based discount drugstore chain. No one officially confirmed the talks to the publication, but a source told it that the two companies were close to a deal.
Phar-Mor officials could not be reached to comment this morning.
Previous talks: Phar-Mor said last year that the two companies talked about joining, but the talks ended without a deal. Union officials at Phar-Mor's Tamco distribution center said Snyder's officials toured the plant and liked what they saw.
Drug Store News said in an editorial this week that picking up the distribution center is just what Snyder's needs as it continues to expand its chain through acquisitions. Company officials have said many times that it must buy or build a distribution center to lower its costs and centralize its distribution efforts.
Room to grow: Tamco has room for expansion because it was built in the days when Phar-Mor had four times as many stores as it does today. Tamco once had 1,100 employees and now has nearly 300.
The deal also would make sense because it would bring together Phar-Mor operations and those of Drug Emporium, the publication said. Snyder's acquired that Columbus-based drugstore chain last year.
A deal with Phar-Mor would require approval from U.S. Bankruptcy Court in Youngstown.
After filing for bankruptcy protection last September, Phar-Mor closed 65 stores around the country and retained 74. It is working on a plan to emerge from bankruptcy court.
Phar-Mor officials have said the money-losing chain must get larger to survive because it needs to spread out its overhead across more stores.
shilling@vindy.com