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| website=[https://web.archive.org/web/20010519141827/http://www.phar-mor.com/ www.phar-mor.com] (2001 archive)
| website=[https://web.archive.org/web/20010519141827/http://www.phar-mor.com/ www.phar-mor.com] (2001 archive)
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'''Phar-Mor''' (stylized as '''PHA℞-MOR''') was a [[United States]] chain of discount [[drug stores]], based in [[Youngstown, Ohio]], and founded by [[Michael I. Monus|Michael "Mickey" Monus]] and [[David Shapira]] in 1982. Some of its stores used the names '''Pharmhouse''' and '''Rx Place''' (purchased in the mid-1990s from the [[F.W. Woolworth Company]]). Low prices were advertised to bring in a large volume of sales with the slogans "Phar-Mor power buying gives you Phar-Mor buying power" and "Phar-Mor For Less." Another common slogan in their TV commercials was "Power buying saves: Save at Phar-Mor."
'''Phar-Mor''' (stylized as '''PHA℞-MOR''') had been a [[United States]] chain of discount [[drug stores]], based in [[Youngstown, Ohio]], and founded by [[Michael I. Monus|Michael "Mickey" Monus]] and [[David Shapira]] in 1982. Some of its stores used the names '''Pharmhouse''' and '''Rx Place''' (purchased in the mid-1990s from the [[F.W. Woolworth Company]]). Low prices were advertised to bring in a large volume of sales with the mottos "Phar-Mor power buying gives you Phar-Mor buying power" and "Phar-Mor For Less." Another common motto in their TV commercials had been referred to as "Power buying saves: Save at Phar-Mor."


In 1996, the [[Green Bay, Wisconsin]]-based regional [[discount store]] chain [[ShopKo]] announced a plan to merge with Phar-Mor, but withdrew from the plan a year later, citing irreconcilable differences.<ref>{{cite news| url=http://findarticles.com/p/articles/mi_hb3007/is_n17_v18/ai_n28675294/?tag=content;col1 | work=Chain Drug Review | title=Phar-Mor to merge with ShopKo | year=1996}}</ref><ref>{{cite news| url=http://findarticles.com/p/articles/mi_m3092/is_n19_v35/ai_18752339/?tag=content;col1 | work=Discount Store News | first=Dawn | last=Wilensky | title=ShopKo, Phar-Mor hope merger means healthier days | year=1996}}</ref><ref>{{cite news| url=http://findarticles.com/p/articles/mi_hb5553/is_199704/ai_n22331229/?tag=content;col1 }} {{Dead link|date=April 2011|bot=RjwilmsiBot}}</ref><ref>{{cite news| url=http://findarticles.com/p/articles/mi_m3092/is_n8_v36/ai_19345757/?tag=content;col1 | work=Discount Store News | first=Dawn | last=Wilensky | title=The deal is off; ShopKo looks for another partner | year=1997}}</ref>
Back in 1996, the [[Green Bay, Wisconsin]]-based regional [[discount store]] chain [[Shopko]] had announced a plan to merge with Phar-Mor, but had withdrawn from the plan a year later, citing failed differences.<ref>{{cite news| url=http://findarticles.com/p/articles/mi_hb3007/is_n17_v18/ai_n28675294/?tag=content;col1 | work=Chain Drug Review | title=Phar-Mor to merge with ShopKo | year=1996}}</ref><ref>{{cite news| url=http://findarticles.com/p/articles/mi_m3092/is_n19_v35/ai_18752339/?tag=content;col1 | work=Discount Store News | first=Dawn | last=Wilensky | title=ShopKo, Phar-Mor hope merger means healthier days | year=1996}}</ref><ref>{{cite news| url=http://findarticles.com/p/articles/mi_hb5553/is_199704/ai_n22331229/?tag=content;col1 }} {{Dead link|date=April 2011|bot=RjwilmsiBot}}</ref><ref>{{cite news| url=http://findarticles.com/p/articles/mi_m3092/is_n8_v36/ai_19345757/?tag=content;col1 | work=Discount Store News | first=Dawn | last=Wilensky | title=The deal is off; ShopKo looks for another partner | year=1997}}</ref>


== Business model ==
== Business model ==
Phar-Mor's business model was based on selling a large quantity of merchandise with a very small profit margin. Many products were shipped via direct store delivery, but some were shipped through Tamco warehouses, which Phar-Mor later purchased.
Phar-Mor's business model was based on selling a large quantity of merchandise with a very small profit margin. Many products were shipped via direct store delivery. But some were shipped through [[Tamco]] warehouses, which Phar-Mor had later purchased.


[[Sam Walton]] once called Monus the only retailer that he feared, since he couldn't understand how Phar-Mor grew so rapidly in a short time.<ref name=ESPNPenguins>Farrey, Tom. [http://sports.espn.go.com/ncf/news/story?id=1920867 Souls of the departed haunt Youngstown]. [[ESPN]], 2004-11-12.</ref>
[[Sam Walton]] once called Monus the only retailer that he feared, since he couldn't understand how Phar-Mor grew so rapidly in a short time.<ref name=ESPNPenguins>Farrey, Tom. [http://sports.espn.go.com/ncf/news/story?id=1920867 Souls of the departed haunt Youngstown]. [[ESPN]], 2004-11-12.</ref>


==Bankruptcy==
==Bankruptcy==
In 1992, when the company had grown to over 300 stores and 25,000 employees,<ref>[https://news.google.com/newspapers?id=FPxNAAAAIBAJ&sjid=oIsDAAAAIBAJ&pg=6760,3130357&dq=phar-mor+bankruptcy+employees&hl=en Phar-Mor can pay employees]</ref> Monus and his [[Chief Financial Officer|CFO]] Patrick Finn were accused of [[embezzlement]]: they had allegedly hidden losses and moved about $10 million from Phar-Mor to the [[World Basketball League]] that Monus had founded. Based on deceptive data and [[inventory]], Phar-Mor borrowed millions, ostensibly to finance its unusually rapid growth. In actuality, this infusion of cash was necessary to pay off suppliers. As a result, Phar-Mor had to file for [[bankruptcy]] protection, closed 55 stores and laid off 5,000 employees. Finn testified against Monus and received 33 months in prison. Monus' first trial ended in a [[hung jury]] in 1994; he was convicted at the second trial on 107 federal counts, mostly related to fraud, and sentenced to 17 years and 7 months in federal prison. Prosecutors estimated that the total loss to all investors exceeded $1 billion. The sentence was appealed and later reduced to nine years.
Sometime in 1992, when the company had reached over 300 stores and about 25,000 employees,<ref>[https://news.google.com/newspapers?id=FPxNAAAAIBAJ&sjid=oIsDAAAAIBAJ&pg=6760,3130357&dq=phar-mor+bankruptcy+employees&hl=en Phar-Mor can pay employees]</ref> Monus and his [[Chief Financial Officer|CFO]] Patrick Finn were accused of [[embezzlement]]: allegedly they had hidden the losses and had moved exactly $10 million from Phar-Mor to the [[World Basketball League]] that Monus had established. Based on deceptive data and [[inventory]], Phar-Mor had borrowed millions, ostensibly to finance its unusually rapid growth. In actuality, this infusion of cash was necessary to pay off suppliers. As a result, Phar-Mor had filed for [[bankruptcy]] protection, had closed 55 stores, and had laid off 5,000 employees. Finn testified against Monus and received 33 months in prison. Monus' first trial ended in a [[hung jury]] in 1994; he was convicted at the second trial on 107 federal counts, mostly related to fraud, and sentenced to 17 years and seven months in the federal prison. Prosecutors had estimated that the total loss to all investors had exceeded around $1 billion. The sentence was appealed and later reduced to just nine years.


Several investors in Phar-Mor filed a civil suit against the company's auditors, [[Coopers & Lybrand]]. A jury decided in 1996 that the accountants committed [[common law]] and federal securities law fraud by falsely representing they had performed [[Generally Accepted Auditing Standards|GAAS]] audits when in fact they had failed to do so.
Several investors in Phar-Mor had filed a civil suit against the company's auditors, [[Coopers & Lybrand]]. A jury had decided in 1996 that the accountants had committed [[common law]] and federal securities law fraud by falsely representing they had modeled some [[Generally Accepted Auditing Standards|GAAS]] audits when in fact they had refused to do so.


Phar-Mor emerged from bankruptcy protection in January 1995 with 143 stores remaining,<ref>{{cite news|title=Phar-Mor Reaches Accord|url=https://www.nytimes.com/1995/01/19/business/phar-mor-reaches-accord.html|work=The New York Times|date=January 19, 1995|access-date=December 10, 2010}}</ref> only to be hit hard once again by competition from other large retailers, such as [[Wal-Mart]] and [[Target Corporation|Target]], which began opening new stores with pharmacies.<ref>{{cite news|title=PHAR-MOR Is cutting stores the right strategy?|url=http://www.alzad.com/news/2001/sep/25/phar-mor-is-cutting-stores-the-right-strategy/|author=Don Shilling|publisher=Youngstown News|date=September 25, 2001|access-date=December 10, 2010}}</ref> Phar-Mor, unable to compete, was forced into bankruptcy for the second time in September 2001, only about six and a half years after it had emerged from its prior three-year-long bankruptcy.<ref>{{cite news|title=COMPANY NEWS; PHAR-MOR, DRUGSTORE CHAIN, FILES FOR BANKRUPTCY|url=https://www.nytimes.com/2001/09/25/business/company-news-phar-mor-drugstore-chain-files-for-bankruptcy.html|work=The New York Times|date=September 25, 2001|access-date=December 10, 2010}}</ref> The company was delisted from the [[NASDAQ]] Stock Market on October 10, 2001.<ref>{{cite news|title=Phar-Mor starts putting its house in order|url=http://findarticles.com/p/articles/mi_hb3007/is_18_23/ai_n28868707/|publisher=Chain Drug Review|date=October 22, 2001|access-date=December 11, 2010}}</ref>
Phar-Mor had emerged from bankruptcy protection in January 1995 with 143 stores remaining.<ref>{{cite news|title=Phar-Mor Reaches Accord|url=https://www.nytimes.com/1995/01/19/business/phar-mor-reaches-accord.html|work=The New York Times|date=January 19, 1995|access-date=December 10, 2010}}</ref> Only to remain hit hard once more by some sort of competition from other large retailers, such as [[Wal-Mart]] and also [[Target Corporation|Target]], which had begun opening newer stores with indoor pharmacies.<ref>{{cite news|title=PHAR-MOR Is cutting stores the right strategy?|url=http://www.alzad.com/news/2001/sep/25/phar-mor-is-cutting-stores-the-right-strategy/|author=Don Shilling|publisher=Youngstown News|date=September 25, 2001|access-date=December 10, 2010}}</ref> Phar-Mor, refusing to compete, had been forced into bankruptcy for the second time in September 2001, only around six and a half years after it had emerged from its prior three-year-long bankruptcy.<ref>{{cite news|title=COMPANY NEWS; PHAR-MOR, DRUGSTORE CHAIN, FILES FOR BANKRUPTCY|url=https://www.nytimes.com/2001/09/25/business/company-news-phar-mor-drugstore-chain-files-for-bankruptcy.html|work=The New York Times|date=September 25, 2001|access-date=December 10, 2010}}</ref> The company was delisted from the [[NASDAQ]] Stock Market on October 10, 2001.<ref>{{cite news|title=Phar-Mor starts putting its house in order|url=http://findarticles.com/p/articles/mi_hb3007/is_18_23/ai_n28868707/|publisher=Chain Drug Review|date=October 22, 2001|access-date=December 11, 2010}}</ref>


Phar-Mor became weaker during its last years of business. The company tried to return to its Power Buying concept before it had filed for bankruptcy, but to no avail. Without Power Buying, Phar-Mor found itself directly competing with [[CVS Pharmacy|CVS]] and [[Walgreens]], and lost out because of other chains' convenient locations.<ref>{{cite news|title=PHAR-MOR Its promise unfulfilled, chain to die |url=http://www.vindy.com/news/2002/jul/18/phar-mor-its-promise-unfulfilled-chain-to-die/?print |author=Don Shilling|publisher=[[The Vindicator]]|date=July 18, 2002}}</ref> Phar-Mor's second bankruptcy was eventually to result in its total [[liquidation]].
Phar-Mor had become weaker during its last years of business. The company had tried to return to its Power Buying concept before it had filed for bankruptcy, but to no avail. Without Power Buying, Phar-Mor had found itself directly competing with [[CVS Pharmacy|CVS]] and [[Walgreens]], and had lost out because of other chains' convenient locations.<ref>{{cite news|title=PHAR-MOR Its promise unfulfilled, chain to die |url=http://www.vindy.com/news/2002/jul/18/phar-mor-its-promise-unfulfilled-chain-to-die/?print |author=Don Shilling|publisher=[[The Vindicator]]|date=July 18, 2002}}</ref> Phar-Mor's second bankruptcy was eventually to result in its total [[liquidation]].


In July 2002, a judge in Youngstown approved the sale of Phar-Mor Inc.'s $141 million in assets and inventory. Going-out-of-business sales began at the pharmacy chain's remaining 73 stores. Liquidation of Phar-Mor's inventory was handled by The Ozer Group of [[Needham, Massachusetts]] and Hilco Merchant Resources of [[Northbrook, Illinois]].<ref>{{cite news|title=Phar-Mor liquidation sales start|url=http://www.timesonline.com/phar-mor-liquidation-sales-start/article_c997ca51-529c-58bc-8985-f64d619ed181.html|publisher=Timesonline.com|date=July 21, 2002|access-date=August 15, 2015}}</ref> Its Youngstown-area assets were purchased by [[Giant Eagle]] in bankruptcy court.
In July 2002, a judge in Youngstown had approved the sale of Phar-Mor Inc.'s $141 million in assets and inventory. Going-out-of-business sales began at the pharmacy chain's remaining 73 stores. Liquidation of Phar-Mor's inventory was handled by The Ozer Group of [[Needham, Massachusetts]] and Hilco Merchant Resources of [[Northbrook, Illinois]].<ref>{{cite news|title=Phar-Mor liquidation sales start|url=http://www.timesonline.com/phar-mor-liquidation-sales-start/article_c997ca51-529c-58bc-8985-f64d619ed181.html|publisher=Timesonline.com|date=July 21, 2002|access-date=August 15, 2015}}</ref> Its Youngstown-area assets were purchased by [[Giant Eagle]] in bankruptcy court.


The case was featured in an episode of the [[Public Broadcasting Service|PBS]] show ''[[Frontline (U.S. TV series)|Frontline]]'', entitled "How to Steal $500 Million".<ref>{{cite news|title=FRONTLINE: previous reports: transcripts: how to steal $500 million|url=https://www.pbs.org/wgbh/pages/frontline/programs/transcripts/1304.html|author1=Jim Gilmore |author2=Paul Judge |author3=Paul Solman |name-list-style=amp |publisher=PBS|date=November 8, 1994|access-date=July 16, 2012}}</ref>
The case was featured in an episode of the [[Public Broadcasting Service|PBS]] show ''[[Frontline (U.S. TV series)|Frontline]]'', entitled "How to Steal $500 Million".<ref>{{cite news|title=FRONTLINE: previous reports: transcripts: how to steal $500 million|url=https://www.pbs.org/wgbh/pages/frontline/programs/transcripts/1304.html|author1=Jim Gilmore |author2=Paul Judge |author3=Paul Solman |name-list-style=amp |publisher=PBS|date=November 8, 1994|access-date=July 16, 2012}}</ref>

Revision as of 04:20, 28 December 2021

Phar-Mor
Company typePharmacy
IndustryRetail
Founded1982
Defunct2002
FateBankruptcy, Liquidation
HeadquartersYoungstown, Ohio, United States
Key people
Michael I. Monus, David Shapira
ProductsPharmacy, Liquor, Cosmetics, Health and Beauty Aids, General Merchandise, Snacks, 1 Hour Photo
Number of employees
25,000
SubsidiariesThe RX Place
Pharm House
Websitewww.phar-mor.com (2001 archive)

Phar-Mor (stylized as PHA℞-MOR) had been a United States chain of discount drug stores, based in Youngstown, Ohio, and founded by Michael "Mickey" Monus and David Shapira in 1982. Some of its stores used the names Pharmhouse and Rx Place (purchased in the mid-1990s from the F.W. Woolworth Company). Low prices were advertised to bring in a large volume of sales with the mottos "Phar-Mor power buying gives you Phar-Mor buying power" and "Phar-Mor For Less." Another common motto in their TV commercials had been referred to as "Power buying saves: Save at Phar-Mor."

Back in 1996, the Green Bay, Wisconsin-based regional discount store chain Shopko had announced a plan to merge with Phar-Mor, but had withdrawn from the plan a year later, citing failed differences.[1][2][3][4]

Business model

Phar-Mor's business model was based on selling a large quantity of merchandise with a very small profit margin. Many products were shipped via direct store delivery. But some were shipped through Tamco warehouses, which Phar-Mor had later purchased.

Sam Walton once called Monus the only retailer that he feared, since he couldn't understand how Phar-Mor grew so rapidly in a short time.[5]

Bankruptcy

Sometime in 1992, when the company had reached over 300 stores and about 25,000 employees,[6] Monus and his CFO Patrick Finn were accused of embezzlement: allegedly they had hidden the losses and had moved exactly $10 million from Phar-Mor to the World Basketball League that Monus had established. Based on deceptive data and inventory, Phar-Mor had borrowed millions, ostensibly to finance its unusually rapid growth. In actuality, this infusion of cash was necessary to pay off suppliers. As a result, Phar-Mor had filed for bankruptcy protection, had closed 55 stores, and had laid off 5,000 employees. Finn testified against Monus and received 33 months in prison. Monus' first trial ended in a hung jury in 1994; he was convicted at the second trial on 107 federal counts, mostly related to fraud, and sentenced to 17 years and seven months in the federal prison. Prosecutors had estimated that the total loss to all investors had exceeded around $1 billion. The sentence was appealed and later reduced to just nine years.

Several investors in Phar-Mor had filed a civil suit against the company's auditors, Coopers & Lybrand. A jury had decided in 1996 that the accountants had committed common law and federal securities law fraud by falsely representing they had modeled some GAAS audits when in fact they had refused to do so.

Phar-Mor had emerged from bankruptcy protection in January 1995 with 143 stores remaining.[7] Only to remain hit hard once more by some sort of competition from other large retailers, such as Wal-Mart and also Target, which had begun opening newer stores with indoor pharmacies.[8] Phar-Mor, refusing to compete, had been forced into bankruptcy for the second time in September 2001, only around six and a half years after it had emerged from its prior three-year-long bankruptcy.[9] The company was delisted from the NASDAQ Stock Market on October 10, 2001.[10]

Phar-Mor had become weaker during its last years of business. The company had tried to return to its Power Buying concept before it had filed for bankruptcy, but to no avail. Without Power Buying, Phar-Mor had found itself directly competing with CVS and Walgreens, and had lost out because of other chains' convenient locations.[11] Phar-Mor's second bankruptcy was eventually to result in its total liquidation.

In July 2002, a judge in Youngstown had approved the sale of Phar-Mor Inc.'s $141 million in assets and inventory. Going-out-of-business sales began at the pharmacy chain's remaining 73 stores. Liquidation of Phar-Mor's inventory was handled by The Ozer Group of Needham, Massachusetts and Hilco Merchant Resources of Northbrook, Illinois.[12] Its Youngstown-area assets were purchased by Giant Eagle in bankruptcy court.

The case was featured in an episode of the PBS show Frontline, entitled "How to Steal $500 Million".[13]

The stores in the Youngstown area were eventually sold to Marc's, another discount grocery drugstore chain.

References

  1. ^ "Phar-Mor to merge with ShopKo". Chain Drug Review. 1996.
  2. ^ Wilensky, Dawn (1996). "ShopKo, Phar-Mor hope merger means healthier days". Discount Store News.
  3. ^ http://findarticles.com/p/articles/mi_hb5553/is_199704/ai_n22331229/?tag=content;col1. {{cite news}}: Missing or empty |title= (help) [dead link‍]
  4. ^ Wilensky, Dawn (1997). "The deal is off; ShopKo looks for another partner". Discount Store News.
  5. ^ Farrey, Tom. Souls of the departed haunt Youngstown. ESPN, 2004-11-12.
  6. ^ Phar-Mor can pay employees
  7. ^ "Phar-Mor Reaches Accord". The New York Times. January 19, 1995. Retrieved December 10, 2010.
  8. ^ Don Shilling (September 25, 2001). "PHAR-MOR Is cutting stores the right strategy?". Youngstown News. Retrieved December 10, 2010.
  9. ^ "COMPANY NEWS; PHAR-MOR, DRUGSTORE CHAIN, FILES FOR BANKRUPTCY". The New York Times. September 25, 2001. Retrieved December 10, 2010.
  10. ^ "Phar-Mor starts putting its house in order". Chain Drug Review. October 22, 2001. Retrieved December 11, 2010.
  11. ^ Don Shilling (July 18, 2002). "PHAR-MOR Its promise unfulfilled, chain to die". The Vindicator.
  12. ^ "Phar-Mor liquidation sales start". Timesonline.com. July 21, 2002. Retrieved August 15, 2015.
  13. ^ Jim Gilmore; Paul Judge & Paul Solman (November 8, 1994). "FRONTLINE: previous reports: transcripts: how to steal $500 million". PBS. Retrieved July 16, 2012.
  • Marianne M. Jennings: "Phar-mor and Michael Monus"
  • Marylynne Pitz: "Jury finds Phar-Mor's auditors negligent", Pittsburgh Post-Gazette, 15 February 1996
  • "Appeals court rejects convicted executive's request for new trial", The Associated Press, 26 January 2004
  • United States v. Monus, decision of appeals court 1997
  • Marcus Gleisser: "Not-guilty vote worth $50,000", Plain Dealer (Cleveland, Ohio), 4 March 1998
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