Some know it as the tragedy of Youngstown, Ohio, others know it as the biggest corporate fraud case before Enron, others simply know it as...Phar-mor, where power buying equaled much more buying power, to quote there early television ad's. Phar-Mor was a discount drug store chain based in Youngstown, Ohio and founded in 1982 by Michael "Mickey" Monus and David Shapira, who at the time, just became CEO of Giant Eagle, a Northeast Ohio known grocery store chain based outside Pittsburgh, Pennsylvania.
Mickey ran stores throughout the 90's under the names Pharmhouse and Rx Place, purchased from 5-10 chain F. W. Woolworth. Interesting fact for the people of Wisconsin, particularly Green Bay, may know the chain Shopko, in 1996, had plans to merge with Phar-Mor, but backed out a year later because of unresolved dispute among the two companies, good thing, because after the bankruptcy, we may not be shopping at Shopko either, its funny how things work out before something like that happens, and we think "what could have been", like that episode of Friends, where everyone is leading different lives based on different actions growing up.
The business principle was a play off of the name "Phar-Mor", as the company purchased a large quantity of merchandise from vender's for far less the asking price and sold it for far less, and still making a profit, obviously it didn't work for long, but it was a smart idea in the beginning, as anything is, but later, problems surface and the creators are so blinded by not wanting to be wrong, and in return, bring everyone else who helped them down with them.
The only person that feared Phar-Mor was Sam Walton, the founded of Wal-Mart, that at the time, once called Monus the only retailer that he couldn't understand how they grew so rapidly in a short time.
In 1992, the company had 300 stores in the region they served and had 25,000 employee's, this is when the founding men, Patrick Finn, CFO, and Mickey were accused of embezzlement. Mickey moved around some 10 million dollars around companies and foundations he started, and Phar-Mor filed for bankruptcy and closed 55 stores the following year, laying off 5,000.
Patrick Finn testified against Monus in court and was sentenced to 33 months in prison, and Monus was ended in a hung jury in 1994, as his court case was used to bring the truth to Youngstown, and shocked the city with the Frontline special: How to Steal 500 Million Dollars.
In January 1995, Phar-Mor came out of bankruptcy and had 143 stores remaining. By this time, Wal-Mart and Target were competing at a much larger scale, with pharmacies of their own in most plaza's and shopping centers Phar-Mor stores were at, that led them into bankruptcy again in September 2001. Phar-Mor stopped trading on the NASDAQ on October 10, 2001.
What got them to the top, ultimately killed them, and without the concept of "power buying", basically they were directly competing with CVS and Walgreen's, and Rite-Aid, among other chains, and this is what brought them down. In July 2002, the court approved the sale of Phar-Mor, a 141 million dollars and assets and inventory. Going-out-of-business sales pushed the stuff out of buildings that did not belong to them any more, and Phar-Mor was "NO-Mor"!
I hope this was an Illinois location?
Location near Cincinnati?
And, because this is a specifically Chicago-themed blog on shopping and malls, here is the list of some Phar-Mor stores around are area from an ad ran in the Chicago Tribune sometime in the late 90's.
Which one do you remember shopping at?
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