{{Use dmy dates|date=September 2023}} {{Short description|American drug store chain}} {{More footnotes|date=October 2008}} {{Infobox company | name = Phar-Mor | logo = Phar-Mor Drug Store Final Logo.png | type = Pharmacy | foundation = 1982 | location = Youngstown, Ohio, U.S. | key_people = Michael I. Monus, David Shapira | industry = Retail | num_employees = 25,000 | products = Pharmacy, Liquor, Cosmetics, Health and Beauty Aids, General Merchandise, Snacks, 1 Hour Photo | defunct = 2002 | fate = Bankruptcy, Liquidation | subsid = The RX Place <br> Pharm House| | website = [https://web.archive.org/web/20010519141827/http://www.phar-mor.com/ www.phar-mor.com] (2001 archive) }} '''Phar-Mor''' (stylized as '''{{proper name|PHA℞-MOR}}''') was 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 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."
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 |title=Wayback Machine has not archived that URL.}} {{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 == 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. thumb|Logo used from 1986-1999 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. [https://www.espn.com/college-football/news/story?id=1920867 Souls of the departed haunt Youngstown]. ESPN, 2004-11-12.</ref>
==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 CFO Patrick Finn were accused of embezzlement: they had allegedly hidden losses and moved about $10 million (~${{Format price|{{Inflation|index=US-GDP|value=10000000|start_year=1992}}}} in {{Inflation/year|US-GDP}}) 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. In 1995, he was convicted at the second trial on 109 federal counts, mostly related to fraud,<ref>{{cite news|url=https://www.latimes.com/archives/la-xpm-1995-05-26-fi-6404-story.html|title=Drugstore Exec Convicted in Fraud Scheme : Crime: Phar-Mor founder could face 1,246 years in prison, millions in fines. Appeal is planned.|author=Associated Press|publisher=Los Angeles Times|date=May 26, 1995|accessdate=August 11, 2025}}</ref> 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.
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 GAAS audits when in fact they had failed 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, 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|archive-date=July 7, 2011|archive-url=https://web.archive.org/web/20110707121530/http://www.alzad.com/news/2001/sep/25/phar-mor-is-cutting-stores-the-right-strategy/|url-status=dead}}</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 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 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|archive-date=3 July 2019|access-date=2 August 2015|archive-url=https://web.archive.org/web/20190703144625/http://www.vindy.com/news/2002/jul/18/phar-mor-its-promise-unfulfilled-chain-to-die/?print|url-status=dead}}</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 $141 million (~${{Format price|{{Inflation|index=US-GDP|value=141000000|start_year=2002}}}} in {{Inflation/year|US-GDP}}) 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 PBS show ''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|archive-date=January 11, 2012|archive-url=https://web.archive.org/web/20120111105148/http://www.pbs.org/wgbh/pages/frontline/programs/transcripts/1304.html|url-status=dead}}</ref>
The stores in the Youngstown area were eventually sold to Marc's, another discount grocery drugstore chain.
== References == {{Reflist}} * 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 * [https://web.archive.org/web/20041224060640/http://www.law.emory.edu/6circuit/oct97/97a0311p.06.html United States v. Monus], decision of appeals court 1997 * Marcus Gleisser: "Not-guilty vote worth $50,000", Plain Dealer (Cleveland, Ohio), 4 March 1998
Category:Retail companies established in 1982 Category:Retail companies disestablished in 2002 Category:Defunct pharmacies of the United States Category:Companies based in Youngstown, Ohio Category:Defunct companies based in Ohio Category:1982 establishments in Ohio Category:2002 disestablishments in Ohio Category:Health care companies based in Ohio Category:Companies that filed for Chapter 11 bankruptcy in 1992 Category:Companies that filed for Chapter 11 bankruptcy in 2001