The drugstore chain is increasing its advertising to try to draw shoppers back.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- Phar-Mor is gaining confidence in its future even as it reports that it lost $45 million in the three months before it filed for bankruptcy protection.
John Ficarro, Phar-Mor senior vice president, said the company is placing advertising circulars today in newspapers throughout its eight-state market.
The Youngstown-based discount drugstore hadn't advertised heavily for months because its store shelves were depleted in some areas. Ficarro said Phar-Mor didn't want to draw in customers and have them be disappointed in the selection.
That selection is beginning to improve, however, he said.
The flow of goods through its Tamco distribution center in Austintown is about 75 percent of normal, he said.
Word to suppliers: Phar-Mor has been working to persuade suppliers that they will be paid for shipments.
Ficarro said Phar-Mor is pointing out to suppliers that Judge William T. Bodoh of U.S. Bankruptcy Court in Youngstown approved a financing plan for the company Oct. 23. The plan allows Phar-Mor to borrow money for operations through Fleet Retail Finance.
Ficarro said sales figures are starting to improve but he couldn't predict what the financial figures for the current quarter will show.
The figures for the quarter that ended Sept. 29 were dismal. Phar-Mor said Tuesday that it lost $45 million in the quarter, which is the first of its fiscal year, compared with a loss of $8.5 million in the same quarter last year.
The operating loss at the stores was $9.8 million.
Store closings: Last quarter's loss also included $31.2 million in charges for reorganization expenses. Ficarro said about $16 million of that was an accounting charge for a loss in the value of inventory at stores that are being closed.
That merchandise was sold for $33 million to a liquidation group which is selling the merchandise in going-out-of-business sales.
The loss also includes a charge of about $12 million for the reduction in value of store equipment and fixtures.
Sales for the quarter were $280 million, compared with $308.2 million in the same quarter last year.
As part of its attempt to emerge from bankruptcy court, Phar-Mor is closing 65 stores.
Ficarro said nearly all of those stores will be closed by the end of this month.
It intends to continue operating 74 stores. All area stores are remaining open except the New Castle store.