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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
JULY 14, 1998
(Exact name of registrant as specified in its charter)
DRUG EMPORIUM, INC.
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
DELAWARE 0-16998 31-1064888
(Address of principal executive offices)
155 HIDDEN RAVINES DRIVE
POWELL, OHIO 43065
Registrant's telephone number, including area code
(740) 548-7080
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ITEM 5. OTHER EVENTS.
Drug Emporium, Inc. hereby reports information related to a franchise buyout, an
extension and modification of its shareholder rights plan and an on-line
prescription drug service, as set forth in the press release dated July 14, 1998
and included herein as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Exhibit 99.1 Press Release Dated July 14, 1998
NEWS ARTICLE RELATED TO DRUG EMPORIUM, INC. ANNOUNCES FRANCHISE BUY
OUT, RIGHTS PLAN EXTENSION AND NEW WEB-SITE SERVICES
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: July 23, 1998 DRUG EMPORIUM, INC.
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/s/ David L. Kriegel
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David L. Kriegel, President
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Exhibit 99.1
DRUG EMPORIUM, INC. ANNOUNCES FRANCHISE BUY OUT,
RIGHTS PLAN EXTENSION AND NEW WEB-SITE SERVICES
POWELL, OHIO, JULY 14, 1998 -- Drug Emporium, Inc. has entered into a
termination agreement with Western Drug Distributors, Inc., its franchise store
operator in the Seattle and Portland areas, under which Drug Emporium will
receive a $15.4 million lump sum payment in exchange for terminating Western
Drug's franchise obligations. Termination is contingent upon the successful
closing of the previously announced sale of Western Drug to Longs Drug Stores of
Walnut Creek, California. It is anticipated that the closing between Longs and
Western Drug and the payment to Drug Emporium will take place later this month.
David L. Kriegel, chairman and CEO of Drug Emporium, said "Western
Drug, under the leadership of Mr. Jeffrey Meder, has consistently been one of
our better performing franchise entities. Mr. Meder was named Drug Emporium
Franchise Operator of the Year in 1997. While we are disappointed that Western
Drug is leaving the Drug Emporium family, we believe that this transaction
represents an opportunity for Western Drug and Drug Emporium shareholders."
Drug Emporium also announced that its Board of Directors has adopted an
Amended and Restated Rights Agreement extending the termination date of its
existing Plan to July 1, 2008. Certain other changes to its Plan were also made,
including reducing the ownership threshold that triggers the Plan to 15 percent.
The Plan was not renewed in response to any specific takeover threat. The Plan
is designed to assure that all of Drug Emporium's shareholders receive fair and
equal treatment in any proposed takeover by guarding against abusive tactics
that would otherwise allow a purchaser to gain control of the Company without
paying all shareholders a control premium. The Rights will continue to trade
with the Drug Emporium common stock. This continuation of Rights will not impact
reported earnings and is not taxable to Drug Emporium or its stockholders.
In other news, beginning July 19, 1998, Drug Emporium will be offering
a web-site mail order prescription drug service that is designed to meet the
needs of the American consumer's busy lifestyle. Customers can order their
prescriptions from their home computer for direct home delivery. Patients will
simply go to the Drug Emporium web-site at www.drugemporium.com and select the
DE DirectRx Online Pharmacy icon. Free shipping is being offered to new web-site
customers on their first order.
In addition to prescription medications, diabetic testing supplies will
also be offered to Medicare-eligible customers through this exciting new
service. With the addition of prescription medications and diabetic testing
supplies at the DE Direct Rx site to the already existing DE Direct OTC site,
Drug Emporium now has a complete virtual store for its cyber customers to shop.
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Mr. Kriegel noted, "Our DE Direct Prescription Ordering System will
allow us to tap into new customers that do not live near a Drug Emporium store
as well as enabling us to offer a more convenient service to our current
customers. We also have had a high degree of customer acceptance to our on-line
"Ask A Pharmacist" program, where we provide expert pharmacist advice to our
website users."
Drug Emporium is a national chain of 133 Company-owned stores operating
under the names Drug Emporium and F&M. All stores operate full-service
pharmacies and specialize in discount-priced merchandise including health and
beauty aids, cosmetics, vitamins and greeting cards. Twenty-one of the Company's
locations are open 24 hours a day.
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FOR FURTHER INFORMATION: Michael P. Leach, Chief Financial Officer
740-548-7080 x150
PLEASE VISIT OUR WEBSITE
AND ON-LINE HEALTH, BEAUTY, AND PRESCRIPTION PRODUCTS STORE:
http://www.drugemporium.com
For further information: Michael P. Leach
Chief Financial Officer
(740) 548-7080 Ext.150
[email protected]
