Snyder’s Drug Stores Files for Bankruptcy
MINNEAPOLIS (AP) _ Snyder’s Drug Stores, Inc. said Friday that it has filed for Chapter 11 bankruptcy and will sell or close its Drug Emporium subsidiary and recapitalize the Snyder’s chain.
The voluntary reorganization proceeding was filed before Judge William Bodah in U.S. Bankruptcy Court in Youngstown, Ohio. Snyder’s said the filing had the full support of the company’s major creditors and largest supplier.
``The actions we are taking at Drug Emporium are difficult, but necessary,″ said Gordon Barker, Snyder’s president. ``Despite significant capital infusions and the best efforts of our employees, Drug Emporium’s performance has failed to improve since we acquired it out of bankruptcy in September 2001.″
Barker said the Snyder’s chain, based in Minnetonka, Minn., expects to emerge from the restructuring as a stronger, better-capitalized company committed to growth.
Snyder’s has been owned by the Katz Group, one of Canada’s largest private organizations, since October 1999. Katz, based in Edmonton, Alberta, also owns Canada’s largest and only national mail order pharmacy operation, Meditrust Pharmacy Inc.
Snyder’s principal lender has agreed to provide financing to help the chain pay its bills and continue normal operations, Barker said.
For customers, it will be business as usual at the 53 independent Snyder’s retailers, which are not involved in the reorganization, and at 78 corporately-owned Snyder’s Drug Stores, Barker said.
Snyder’s said its principal supplier has agreed to continue to supply the company through the restructuring process, and that the two parties are in the process of concluding long-term supply agreements.
``We are committed to raising the level of support we provide to our independent retailers, and ensuring that we retain constructive relationships with our suppliers going forward,″ Barker said.
At Drug Emporium, employees and customers will be advised about store sales and closings as they occur. Until such time, stores will continue to operate, employees will continue to receive their wages and benefits, and prescriptions will continue to be filled, he said.
The 77 corporately owned and operated Drug Emporium stores affected by the reorganization plan are located in Pennsylvania, New Jersey, New York, Michigan, Ohio, Missouri, Oklahoma, Kentucky and Wisconsin. Not affected are several independently owned and operated Drug Emporium stores in Texas and West Virginia.
On the Net:
Snyder’s Drug Stores: http://www.snyderdrug.com