Five Baltimore-area F&M; stores have been sold to the Drug Emporium chain as part of a $39 million deal that also involves 18 Detroit-area stores, the two companies announced yesterday.
Meanwhile, F&M;, a deep discount drug and variety chain, said it is also seeking to sell all 12 of its remaining stores in Maryland.
The five F&M; stores slated for new ownership are in Dundalk, Towson, Bel Air, Glen Burnie and Baltimore.
One of those stores will close rather than convert to a Drug Emporium, but Timothy C. McCord, chief financial officer for Drug Emporium, declined to identify the store that will close.
"We want to talk to the employees there first," Mr. McCord said.
Each of the Baltimore-area stores has 40 to 60 employees, and most workers are expected to be retained in the transition to the newly remodeled stores, which is expected to occur after Jan. 1, Mr. McCord said.
F&M; filed for protection from creditors under Chapter 11 of the Federal Bankruptcy Code in December and began marketing its discount drug and variety stores last August.
The deal is subject to final approval by the U.S. Bankruptcy Court in Detroit. Such approval is expected to occur in early November, according to Laura Kendall, F&M;'s chief financial officer.
Both chains have similar approaches to marketing. But the 40-year-old F&M; chain was started as a general variety store that later expanded into pharmacy merchandise. In contrast, the 18-year-old Drug Emporium chain has always placed more emphasis on the traditional drugstore business, Mr. McCord said.
The other Maryland F&M; stores -- also up for sale -- are in Annapolis, Columbia, Randallstown, Baltimore (on West 29th Street), Owings Mills, Waldorf, Gaithersburg, Rockville, Lanham, Frederick, Largo and Greenbelt. In a statement released yesterday, David L. Kriegel, Drug Emporium's chief executive, said the $39 million purchase was financed through "cash sources and bank borrowing."
Drug Emporium typically operates stores in the 25,000-to-26,000 square foot range, while F&M; stores are often larger, Mr. McCord said.