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Drug Chain Selling Stake in Calif. Stores

February 01, 2001|From Associated Press

Drug Emporium Inc. said Wednesday that it is selling a majority stake in its 20 California stores as part of a restructuring plan for the financially strapped drugstore chain.

Tim Ziemke, senior vice president of marketing for Drug Emporium, is leading the group making the acquisition.

Terms of the deal were not disclosed, but Drug Emporium said it would keep a minority interest in the new company.

The deal is expected to close in about 45 days.

The company, based Columbus, Ohio, had said in early January that it might sell some assets as part of a plan to regain its financial footing.

The company reported an $8.7-million loss for its fiscal third quarter ended Nov. 25. It unloaded its online drugstore last summer to after losing millions on the venture.

Drug Emporium Chief Executive David Kriegel said that, besides strengthening the company's finances, the sale will allow it to consolidate its operations in the Midwest and Northeast.

"This is a step forward in improving Drug Emporium's financial situation," he said.

With the sale, the company will reduce the number of drugstores it owns and operates from 132 to 112.

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