YOUNGSTOWN, Ohio — Phar-Mor said it will close up to 63 of its 309 drug stores, with 36 closing immediately and another 27 to be shut if the company can’t reach new terms under its lease agreements. Two of the locations to close are in South Florida.
Phar-Mor, which filed for Chapter 11 after discovering a $350 million inside fraud and embezzlement scheme, said closing the 36 unprofitable stores will help ensure the company’s long-term viability.
The South Florida stores to close are in Hialeah, and on Southern Boulevard in Royal Palm Beach. They will close or begin closing in October, and prescriptions will be transferred to other stores, spokeswoman Carol Robinson said.
The move is part of the company’s month-long review of its operations. Phar- Mor said the review revealed that it had expanded into and maintained stores and product lines that were losing money. Phar-Mor did not realize the stores were unprofitable because top executives tampered with financial statements to conceal losses.
Phar-Mor said the review showed that its remaining 246 stores are profitable, and those that are not profitable can be turned around.
“The operational review confirmed that our core group of stores are profitable, and Phar-Mor’s concept of deep discount retailing remains strong,” said David Shapira, chief executive officer.
— Business Writer David Altaner contributed to this report.
