PHAR-MOR Valley stockholder copes with loss of investment
Once legal matters are completed, Phar-Mor will disappear.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- Wayne Mancino said he was trying to do the right thing when he bought about $4,000 in Phar-Mor stock a few years ago.
"It was a local company, and I've been a resident all my life. It was like giving back to the community in a way," said the Boardman certified public accountant.
Today, the stock is worthless.
Phar-Mor, which filed for bankruptcy protection in September, is selling its prescription files, inventory and other assets to a group of four companies for $141 million and will cease to exist as a company once it wraps up various legal matters.
Mancino said the investment loss doesn't bother him because he's been investing for more than 20 years and has plenty of good companies in his portfolio.
What does bother him is the way the company was managed.
"The stock is worthless, and these idiots walk away with all the money," he said.
Soaking it up
As Phar-Mor was preparing to sell out, its co-chief executives, Abbey Butler and Melvyn Estrin, agreed to resign in exchange for splitting a $3 million payment.
They had been under pressure from Phar-Mor's unsecured creditors, who contended the two CEOs weren't actively managing the company and were wasting money on expensive East Coast offices and corporate jets.
There were other reasons to like the Youngstown-based discount drugstore chain besides its being local, Mancino said.
"I always liked Phar-Mor. The prices were right, and the service was good," he said.
So about four years ago, he began buying stock at between $10 and $12 a share.
That turned out to be the high point for the stock. Annual losses began in 1997, and the stock price fell. Mancino kept buying stock, even at $3 a share, thinking Phar-Mor would rebound.
It never did. The stock fell under $1 a share last year and was delisted from the Nasdaq stock exchange.
"Maybe in 20 years, [the stock certificates] will be worth more because they're antiques," Mancino said with a laugh. "No, they're worthless."
The big losers
He said he doesn't feel bad for himself but for the employees who needed their jobs at Phar-Mor.
Debbie Pasquale of Youngstown was one of the employees at Phar-Mor's Tamco distribution center in Austintown who was told Friday she had lost her job.
Giant Eagle now controls the warehouse but doesn't plan to use it. It also bought the prescription files of 27 Phar-Mor stores and is switching them to its stores.
Giant Eagle is encouraging Phar-Mor workers to apply for Giant Eagle jobs, but Pasquale said not many jobs are available and they are paying minimum wage.
She is angry at Giant Eagle for being part of the buying group that is liquidating Phar-Mor stores and closing the warehouse.
"You'll never see me in a Giant Eagle. People are dumb if they go in any of them," she said.
Rob Borella, a Giant Eagle spokesman, said the Pittsburgh-based grocer will be looking to lease the warehouse to another company but nothing is in the works.
It would be willing to strike a deal with Snyder's Drug Stores if that company is still interested, he said. Snyder's officials could not be reached.
Partnerships involving Giant Eagle investors own the building and lease it to Giant Eagle. Phar-Mor had subleased the building from Giant Eagle.
Snyder's, a Minnesota-based drugstore chain, had negotiated a labor contract with Tamco's 250 workers in case it succeeded in buying Phar-Mor assets.
Its bid was topped, however, by two liquidation companies, Giant Eagle and CVS Corp.
Giant Eagle and CVS have bought the prescription files at 54 Phar-Mor stores. All Phar-Mor stores in the Mahoning and Shenango valleys are included in that group except the store on Market Street in Youngstown.
The pharmacy will remain open at the Market Street store until the prescription files are sold, but the store merchandise is being liquidated along with that in the other stores.
The prescription files at 18 other stores also are still being marketed.
The liquidation companies are starting sales this weekend at all 73 stores to clear out merchandise. All stores are expected to close when the merchandise is gone. Leases to the stores also are being marketed.