Snyder's can ease the pain of Phar-Mor Inc.'s closing
When Snyder's Drug Stores of Minnesota withdrew from negotiations for the purchase of the assets of bankrupt Phar-Mor Inc., the deep discount chain based in Youngstown, the hopes of hundreds of Mahoning Valley residents vanished into thin air.
That's because Snyder's, which operates about 300 stores around the country, had pledged to keep open six of the eight Phar-Mor outlets in the Mahoning and Shenango valleys, said it would move some corporate workers to the region from Minnesota and would have maintained the Tamco distribution center in Austintown.
By contrast, the Hilco Group, which included Giant Eagle, CVS and a liquidation company, left little doubt that if it were the successful bidder, Phar-Mor would become a memory. Hilco was successful -- and kept its word. Giant Eagle and CVS closed the Phar-Mor stores after gaining the lucrative prescription drug files, dismantled the company's headquarters in downtown Youngstown and padlocked the distribution center.
Last week, Snyder's unveiled a proposal to reopen the Tamco distribution center on Victoria Road by Nov. 15 with a full-time staff of 150. And in a gesture of good will and good corporate citizenship, a company official said preference would be given to applicants who had worked for Tamco when it was operated by Phar-Mor.
"We think Youngstown and Austintown have very hard workers that had some bad luck," said Doug Hamlin, chief accounting officer. "Maybe it's time for some good luck."
While we applaud Hamlin's sensitivity to what the workers have experienced, we would point out to him that their loss of jobs had nothing to do with bad luck. Rather, it had to do with the failure of Phar-Mor's management to adapt to the changing economic times and the decision by Giant Eagle and CVS to dismantle the deep discount chain. In effect, they got rid of the competition.
Snyder's, on the other hand, envisions leasing the warehouse from Giant Eagle and using it to serve its 300 stores and perhaps more as the drugstore company expands. Its decision was all but solidified last week when the Austintown Township trustees and the Mahoning County commissioners approved a 10-year, 60 percent tax on $8 million in inventory Snyder's would bring to Tamco.
If everything falls into place, the company would begin hiring in October. And while its goal of 150 employees is 100 less than were on the payroll before the Tamco warehouse closed, it still is significant in light of the Valley's stagnant economy.
Snyder's deserves the support of the region and should be encouraged to give serious thought to a suggestion from Austintown trustees, namely, that it reopen some of the former Phar-Mor drugstores.
Hamlin, the company's chief accounting officer, is right when he says, "We think there are some good areas." Snyder's has the opportunity fill the retail void left by Phar-Mor's demise.