YOUNGSTOWN Losses keep mounting at struggling Phar-Mor
Phar-Mor lost $7.9 million from operations and spent $3.9 million on reorganization expenses.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- Large losses continue to mount at Phar-Mor.
The struggling discount drugstore chain said Monday that it lost $12.2 million in its third fiscal quarter, which ended March 30.
That followed a $7 million loss in the quarter that ended Dec. 29, which was the quarter the company filed for bankruptcy protection.
Gary Holmes, a company spokesman, said the company continues to struggle because of the stiff competition it faces from other retailers.
Last quarter's loss included a $7.9 million shortfall from operations and $3.9 million in reorganization expenses. The company also had some investment losses.
Trustee soughtTo cut the company's losses, the unsecured creditors committee in the bankruptcy case had asked that a trustee be appointed to run Phar-Mor and had backed a sale of Phar-Mor's best stores to Snyders Drug Stores of Minnesota.
The committee placed its request on hold until May 16, however, because Phar-Mor agreed to discuss the future of the company without the involvement of its chief executives Melvyn Estrin and Abbey Butler. Snyders and the CEOs both have made bids for the company.
As part of an attempt to reduce reorganization expenses, the committee also tried last month to stop Phar-Mor from paying incentive bonuses to employees. It said the bonuses were inappropriate because the company is losing money and a retention bonus plan already is in place.
Judge William Bodoh approved $1.17 million in incentive bonuses to 53 employees but disallowed $321,000 that was to be paid to Estrin and Butler.
Last quarter's loss of $12.2 million, or $1.13 a share, compares with a loss of $3.6 million, or 34 cents a share, for the same quarter a year earlier. The year-ago quarter included a one-time gain of $2.6 million from the early retirement of debt.
Sales last quarter were $181.7 million, compared with $300.2 million for the same quarter a year earlier.
Phar-Mor operates 73 stores, compared with 139 a year ago. At stores open at least a year, sales fell about 9 percent last quarter.