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PHAR-MOR COMPLETES REVISED BUSINESS PLAN; STORE CONSOLIDATION, COST REDUCTIONS AND INVESTMENT IN CONTINUING STORES TO REINFORCE POSITION

 YOUNGSTOWN, Ohio, April 16 /PRNewswire/ -- Phar-Mor, Inc. announced today that it had completed a revised business plan designed to restore the company to profitability. The company said that key elements of the plan include the completion of its store consolidation program, reorganization of its corporate overhead and distribution functions, investment in information and distribution technology, and improvements in its merchandising and marketing approach.
 Phar-Mor's CEO Tony Alvarez, said: "We have reached a very important stage in our turnaround process with the completion of the revised business plan. Utilizing more reliable financial data, we've identified a solid core of stores and a plan to significantly reduce our cost structure. We are also confident that we have developed operating, marketing and merchandising strategies to ensure Phar-Mor's long-term success as a deep-discount drug store chain."
 "We've made the tough decisions about store consolidation and overhead reductions -- now we can focus on investing in our core stores and building on our strengths," Alvarez said.
 Phar-Mor previously announced on Feb. 22, 1993 that due to the availability of more reliable financial information regarding its current and historical operations the company would complete a comprehensive evaluation of its operations in order to determine the proper scope of its business going forward.
 Phar-Mor said today that it had finished its evaluation, and that it would complete its store consolidation program by closing from 58 to 66 stores in early May. The company expects that up to eight(8) of the 66 stores will remain open -- pending outcome of negotiations with landlords for lease concessions -- leaving Phar-Mor with a core group of 166 established, geographically-concentrated, profitable deep-discount drug stores going forward. (Attached is a list of the 58 stores scheduled for closing in early May.)
 Phar-Mor said that based on its new store configuration and organizational changes, it would reduce its corporate overhead and distribution costs by approximately 30 percent. The company expects these actions will conclude the downsizing process begun in August 1992, when the company filed for Chapter 11 after uncovering a massive fraud and embezzlement scheme by former management.
 Dave Schwartz, Phar-Mor's president and COO said: "These actions significantly enhance our ability to be a very efficient, very low-cost operator in all aspects of our business. Our new operating structure will enable us to revitalize our merchandising and marketing strategies and to continue to offer our customers the exceptional values they expect from Phar-Mor."
 Schwartz said that the company would accelerate its planned investment in information technology by installing point-of-sale scanning equipment and PDX pharmacy systems in all remaining stores and by implementing a new automated warehouse system to increase efficiency of distribution.
 Phar-Mor said that the downsizing would affect approximately 522 people in corporate, distribution and field support, as well as 3600 full and part-time employees in stores scheduled to be closed. The company said most of the layoffs would occur immediately, with the remainder taking place upon completion of the store closing process and the reorganization of certain functions.
 Phar-Mor said that in evaluating each of the stores targeted for closure, it considered a variety of factors including profitability, growth potential, the strength of Phar-Mor's competitive position in individual markets, geographic location, the ability to obtain lease concessions, and opportunities to improve individual store performance.
 Phar-Mor said that it would petition the U.S. Bankruptcy Court in Youngstown to proceed with the closure of the stores and that it would present a revised business plan to its creditor constituencies in early May. A court hearing for the store closings has been scheduled for May 4, 1993. The stores to be closed will continue normal operations until such time as the court approves the store closing plan. Upon obtaining court approval, the closing stores will begin Going Out of Business (GOB) sales.
 Phar-Mor said that the fraud and embezzlement scheme disguised the fact that many of its stores were unprofitable, which led to over- expansion of the company's store base and to other operational inefficiencies. As previously released on Jan. 22, 1993, Phar-Mor said the fraud was estimated at $499 million.
 Phar-Mor said that it has made significant progress in its turnaround since entering Chapter 11. The company said it had improved its liquidity to approximately $208 million in cash as of April 14, 1993; stabilized its financial position through the negotiation of a $150 million Debtor-in-Possession facility; restored the normal flow of goods and received strong trade support; rebuilt the company's senior management team; developed more reliable financial information needed to run the company, and significantly reduced operating losses.
 Phar-Mor, headquartered in Youngstown, Ohio, is a deep discount drug store chain. On Aug. 17, 1992, Phar-Mor filed for protection under Chapter 11 of the U.S. Bankruptcy Code in the Northern District, Eastern Division of Ohio, in Youngstown.
 PHAR-MOR 4/16/93 ANNOUNCED STORE CLOSING LIST:
 Alabama Birmingham Birmingham
 7001 Crestwood Blvd.
 Ste. 900
 Hoover Riverchase Prominade
 1705 Montgomery Hwy.
 Arizona Phoenix Metro Power Center
 9446 Metro Parkway
 Scottsdale Scottsdale Pavillion
 9009 E. Indiana Bend Road
 Mesa Superstition
 6315 E. Southern Avenue
 Tucson Tuscon Place
 575 E. Wetmore Road
 Colorado Greenwood Village Arapahoe Market Place
 8527 E. Arapahoe Road
 Aurora Aurora Mall
 14401 E. Exposition Avenue
 Florida Gainesville Newberry Crossing
 1009 NW 76th Blvd.
 Ocala Gaitway Plaza
 2701 SW College Road
 Ste 200
 Daytona Beach Volusia Square
 2455 Volusia Suite 800
 Merritt Island Merritt Island
 255 Borman Drive
 Sunrise Sunrise
 8100 W. Oakland Park Blvd.
 Delray Beach Delray Beach
 14620 S. Military Trail
 Penbroke Pines University Market Place
 8360 Pines Blvd.
 Greenacres City Lake Worth
 5851 Lakeworth Road
 Boca Raton W. Boca Square
 21697 State Road No. 7
 Margate Central Parkway
 5259 Cococut Creek Pkwy
 Jensen Beach Treasure Coast Square
 3498 NW Federal Hwy No. 100
 Port Charlotte Port Charlotte
 17701 Murdock Circle
 Bradenton Bradenton
 6915 Manatee Avenue West
 Georgia Macon Macon
 1502 Eisenhower Pkwy
 Albany Albany
 2600 Dawson Road
 Marietta Providence Square
 4101 Roswell Dr. Ste 200
 Marietta Marietta
 1901 Terrell Mill Road SE
 Doraville Doraville
 5600 Buford Hwy
 Duluth Gwinnett
 2340 Pleasant Hill Road
 Kennesaw Cobb Place
 800 Barrett Parkway
 Morrow Southlake Festival
 1576 Southlake Parkway
 Decatur Market Square
 2042 Lawrenceville Hwy
 Iowa Sioux City Regency Plaza
 4271 Sergeant Road
 Illinois Champaign Market Place Shopping Ctr
 111 Convenience Center Road
 Springfield Southwest Plaza
 3110 W. White Oaks Dr.
 Crestwood Rivercrest Center
 4971 W. Cal Sag Road
 Mt. Propect Golf Plaza II
 1050 S. Elmhurst
 Steamwood Westview Shopping Ctr
 1070 S. Barrington
 Chicago The Hall
 4626 W. Diversey
 Naperville Westridge Court
 324 S. Route 59
 Indiana Carmel Village Park Plaza
 2003 E. Greyhound Pass
 Kansas Overland Park Rosana Square
 7104 W. 119th Street
 Kentucky Florence Florence Plaza
 7932 Connector Road
 Louisiana Shreveport Southpark Mall
 8924 Jewella Road Box 72A
 Michigan Flint Mill Creek Center
 G5025 Miller Road Ste 1
 Burton The Courtyard
 G4231 E. Court St.
 North Carolina Hickory Valley Crossing
 2160 Hwy 64/70 Se
 Mathews Windsor Square
 10011 E. Independence
 Charlotte Charl/Tyvola
 5401 South Blvd.
 Asheville Biltmore Plaza
 1000 Brevard Road Ste 170
 Nevada Reno Del Monte Plaza
 6011 S. Virginia Street
 Pennsylvania Frackville Schuylkill Mall
 Route 61 at I-81
 South Carolina Columbia Fashion Place
 2744 Decker Blvd.
 Florence Florence Commons
 2801 David McLeod Blvd.
 Tennessee Knoxville Olde Kingston Towne
 8079 Kingston Pike
 Knoxville E. Towne Commons
 2940 E. Towne Mall Circle
 Chattanooga Hamilton Corner
 2115 Gunbarrel Road
 Texas Corpus Christi Moore Festival Plaza
 5425 S. Padre Island Dr.
 Laredo Plaza De Laredo
 5700 San Bernardo Avenue
 Houston Willowbrook
 7690 F/M 1960 West
 -0- 4/16/93 R
 /CONTACT: Carol Robinson, 216-740-5944, or Robert Mead, 216-740-5951, both of Phar-Mor, Inc./


CO: Phar-Mor, Inc. ST: Ohio IN: REA SU:

WB-OS -- NY021R -- 7014 04/16/93 19:04 EDT
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