drug emporium inc., citing increased
competition from grocery stores, posted a fiscal third-quarter loss
and said it may further tighten management ranks.
   the discount drugstore chain said it had a loss of $2.9 million,
or 17 cents a share, in the quarter ended nov. 28. in the year-ago
quarter, drug emporium earned $637,000, or five cents a share, on
sales of $177.8 million.
   total sales in the quarter rose 3.1% to $183.3 million, but
same-store sales declined 4%. "in a low-cost, low-margin business, a
number like 4% is significant," said vice chairman gary wilber.
   results were also hurt by increased sales, general and
administrative costs, which increased 15% to $39.2 million for the
quarter, said gary dennis, an analyst at j.c. bradford in knoxville,
tenn.
   mr. wilber said the chain took several cost-cutting steps in the
last month, including laying off three executives and eliminating
their posts. the three are richard landers, who was vice president
of merchandise and marketing; robert ramsey, director of marketing;
and frank shanower, vice president of trade relations.
   drug emporium also cut management pay by 5%, froze hiring and
eliminated some executive perquisites. mr. wilber said the board
will consider further cuts when it meets later this month.
   the chain has been in constant turmoil in recent years. in the
last 18 months, it has fired two chief financial officers, retired
its founding chairman and chief executive, philip i. wilber, and
shunted mr. wilber's successor, his son gary, into the newly created
post of vice chairman. the new chairman and chief executive,
longtime director david l. kriegle, assumed his posts last week.
   the elder mr. wilber remains on payroll as a founding chairman.
but that post may be eliminated, along with three other posts, later
this month, the younger mr. wilber said.
   investors had hoped that drug emporium could push through price
increases after rival phar-mor inc. filed for bankruptcy-law
protection last year. but instead, drug emporium found increased
competition from grocery stores with health and beauty sections, and
from mass merchandisers such as wal-mart stores inc. given all the
competition, "i don't think drug emporium has a particularly viable
format," scott & stringfellow inc. analyst neal kaplan said.
   drug emporium is a national chain of 136 company-owned stores and
98 franchised stores. in national over-the-counter trading
yesterday, its shares slipped 62.5 cents to $4.875.