Drug Deal Goes Down

Drug Emporium Inc. (Powell, Ohio), the troubled drugstore chain of about 160 units, has entered an agreement to be purchased by Snyder Drug Stores (Minnetonka, Minn.), a long-time leading drug store chain in the Twin Cities area. Drug Emporium, which had been delisted by the Nasdaq qualifications panel and was being traded over the counter, will file for pre-negotiated Chapter 11 bankruptcy protection as part of the deal.

As part of the bankruptcy reorganization, Drug Emporium may end up selling or closing stores in Atlanta and California, as well as some other yet-to-be-named markets. But most Drug Emporium locations are expected to continue operations under Snyder ownership.

Snyder's began in 1928, as a cigar store in downtown Minneapolis. There are now more than 70 corporate and independently owned Snyder stores in Minnesota, Wisconsin, Iowa, Illinois, South Dakota, Michigan and Montana. Snyder's store count is currently growing at a 20 percent yearly rate. In 1999, it was bought by The Katz Group, Canada's second-largest operator of drug stores, with more than 300 units in five provinces under the Pharma Plus Drug Mart, Rexall Drug Store and The Medicine Shoppe Pharmacy banners.

Drug Emporium runs about 130 stores and franchises about 30 others in 20 states under the Drug Emporium, F&M Super Drug Store and Vix Drug Store names. They're mostly supermarket-sized outlets located mainly in shopping centers, primarily in California, Georgia, Ohio and Pennsylvania.