Drug Wars

Phar-Mor Inc. (Youngstown, Ohio) may be about to join the fray for Drug Emporium, the Powell, Ohio-based drugstore chain that filed for Chapter 11 bankruptcy protection last month. At the time of its filing, on March 26, Drug Emporium said it had agreed to be purchased by Snyder's Drug Stores (Minnetonka, Minn.) for $25 million. But Phar-Mor, with about 140 stores in 24 states, mostly on the East Coast, is evidently willing to make a competing offer.

At the time of its filing, Drug Emporium said it would likely sell or close stores some 50 stores — in Atlanta, California and some other yet-to-be-named markets – and sell the rest to Snyder's, a chain of 70 mostly Midwestern stores. Snyder's is owned 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.

Phar-Mor is a knowing veteran of dealing with bankruptcy. The retailer entered Chapter 11 in 1992 after discovering an embezzlement scheme by company executives. It closed more than 200 stores and emerged from bankruptcy protection in 1995.

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.