<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (NO FEE REQUIRED)
For the transition period from ________ to ________
Commission file number 0-16998
----------
A. Full title of the plan:
DRUG EMPORIUM, INC. EMPLOYEES 401(K) PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
Drug Emporium, Inc.
155 Hidden Ravines Drive
Powell, OH 43065
<PAGE> 2
REQUIRED INFORMATION
In lieu of the requirements of Items 1-3 of Form 11-K, the Drug Emporium, Inc.
Employees 401(k) Plan which is subject to the requirements of the Employee
Retirement Income Security Act of 1974, ("ERISA"), is filing herewith the plan
financial statements and schedules in accordance with the financial reporting
requirements of ERISA.
a) Financial Statements
Independent Auditors' Report
Statements of Net Assets Available
for Plan Benefits
Statements of Changes in Net Assets
Available for Plan Benefits
Notes to Financial Statements
Schedules:
Assets Held for Investment Purposes
Reportable Transactions
b) Exhibits
(23.1) Independent Auditors' Consent
Ernst & Young LLP
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
DRUG EMPORIUM, INC. EMPLOYEES 401(K) PLAN
Date: June 30, 1998 /s/ Jane H. Lagusch
------------- -------------------------------
Jane H. Lagusch, Vice President
<PAGE> 3
Audited Financial Statements
and Schedules
Drug Emporium, Inc.
Employees 401(k) Plan
Years ended December 31, 1997 and 1996
with Report of Independent Auditors
<PAGE> 4
Drug Emporium, Inc. Employees 401(k) Plan
Audited Financial Statements
and Schedules
Years ended December 31, 1997 and 1996
CONTENTS
Report of Independent Auditors ..............................................1
Audited Financial Statements
Statements of Net Assets Available for Plan Benefits ........................2
Statements of Changes in Net Assets Available for Plan Benefits .............6
Notes to Financial Statements ..............................................10
Supplemental Schedules
Schedule of Assets Held for Investment Purposes.............................15
Schedule of Reportable Transactions.........................................16
<PAGE> 5
Report of Independent Auditors
Administrative Committee of the
Drug Emporium, Inc.
Employees 401(k) Plan
We have audited the accompanying statements of net assets available for plan
benefits of the Drug Emporium, Inc. Employees 401(k) Plan (the Plan) as of
December 31, 1997 and 1996, and the related statements of changes in net assets
available for plan benefits for the years then ended. These financial statements
are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan at
December 31, 1997 and 1996, and the changes in its net assets available for plan
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1997 and reportable transactions
for the year then ended, are presented for purposes of complying with the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974 and are not a required part
of the financial statements. The Fund Information in the statement of net assets
available for plan benefits and the statement of changes in net assets available
for plan benefits is presented for purposes of additional analysis rather than
to present the net assets available for plan benefits and changes in net assets
available for plan benefits of each fund. The supplemental schedules and Fund
Information have been subjected to the auditing procedures applied in our audits
of the financial statements and, in our opinion, are fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
June 26, 1998
Columbus, Ohio
1
<PAGE> 6
<TABLE>
Drug Emporium, Inc. Employees 401(k) Plan
Statements of Net Assets Available
for Plan Benefits, with Fund Information
<CAPTION>
DECEMBER 31, 1997
------------------------------------------------------------
STABLE PATHWAY PATHWAY
VALUE INCOME SERIES SERIES
FUND FUND BALANCED CONSERVATIVE
------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments - at fair value $1,175,056 $58,657 $1,879,156 $30,491
Participants loans receivable -- -- -- --
Contributions receivable from employer 7,116 3,757 11,165 2,456
----------------------------------------------------------
Total assets 1,182,172 62,414 1,890,321 32,947
LIABILITIES -- -- -- --
----------------------------------------------------------
Net assets available for plan benefits $1,182,172 $62,414 $1,890,321 $32,947
==========================================================
</TABLE>
See accompanying notes.
2
<PAGE> 7
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
DRUG
EMPORIUM
PATHWAY GROWTH AND INC.
SERIES INCOME INTERNATIONAL DEVELOPMENT COMMON LOAN
GROWTH FUND FUND FUND STOCK FUND TOTAL
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$219,312 $5,137,537 $133,651 $276,909 $467,011 $ -- $9,377,780
-- -- -- -- -- 238,595 238,595
11,704 48,007 8,997 13,290 3,575 -- 110,067
- ------------------------------------------------------------------------------------------------------------
231,016 5,185,544 142,648 290,199 470,586 238,595 9,726,442
-- -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------
$231,016 $5,185,544 $142,648 $290,199 $470,586 $238,595 $9,726,442
============================================================================================================
</TABLE>
3
<PAGE> 8
<TABLE>
Drug Emporium, Inc. Employees 401(k) Plan
Statements of Net Assets Available
for Plan Benefits, with Fund Information
<CAPTION>
DECEMBER 31, 1996
-------------------------------------------
CASH RETIREMENT INCOME AND
MANAGEMENT PRESERVATION GROWTH
FUND TRUST FUND
-------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments - at fair value $13,224 $918,674 $1,464,160
Participants loans receivable -- -- --
Receivables:
Contributions from participants 7,504 19,322 31,213
Accrued investment income -- 160 --
Other 911 381 578
-----------------------------------------
Total assets 21,639 938,537 1,495,951
LIABILITIES
Other 18,417 937 --
-----------------------------------------
Net assets available for plan benefits $ 3,222 $937,600 $1,495,951
=========================================
</TABLE>
See accompanying notes.
4
<PAGE> 9
<TABLE>
<CAPTION>
- --------------------------------------------------------------
DRUG
EMPORIUM
GROWTH INC.
OPPORTUNITIES COMMON LOAN
FUND STOCK FUND TOTAL
- --------------------------------------------------------------
<S> <C> <C> <C>
$2,924,279 $536,248 $ -- $5,856,585
-- -- 109,075 109,075
68,448 -- -- 126,487
-- -- -- 160
1,412 17,342 -- 20,624
- --------------------------------------------------------------
2,994,139 553,590 109,075 6,112,931
9,485 -- 3,730 32,569
- --------------------------------------------------------------
$2,984,654 $553,590 $105,345 $6,080,362
==============================================================
</TABLE>
5
<PAGE> 10
<TABLE>
Drug Emporium, Inc. Employees 401(k) Plan
Statements of Changes in Net Assets Available
for Plan Benefits, with Fund Information
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
-----------------------------------------------------------------------------------------------
STABLE PATHWAY PATHWAY PATHWAY GROWTH &
VALUE INCOME SERIES SERIES SERIES INCOME INTERNATIONAL
FUND FUND BALANCED CONSERVATIVE GROWTH FUND FUND
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Employee contributions $ 189,824 $40,957 $ 294,904 $20,527 $143,200 $ 896,619 $106,916
Employer contributions 7,116 3,757 11,165 2,456 11,704 48,007 8,997
Interest and dividends 48,987 1,847 130,601 1,263 7,523 531,955 14,511
Net realized and unrealized
appreciation in fair value
of investments -- 318 151,258 (687) (8,893) 643,493 (14,011)
--------------------------------------------------------------------------------------------
245,927 46,879 587,928 23,559 153,534 2,120,074 116,413
DEDUCTIONS
Benefit payments 64,654 3,225 133,533 623 2,667 369,959 6,003
Administrative expenses 38 -- 25 -- -- 19 --
--------------------------------------------------------------------------------------------
64,692 3,225 133,558 623 2,667 369,978 6,003
Transfers from (to) other funds 1,000,937 18,760 1,435,951 10,011 80,149 3,435,448 32,238
Net assets available for plan
benefits at beginning of year -- -- -- -- -- -- --
--------------------------------------------------------------------------------------------
Net assets available for plan
benefits at end of year $1,182,172 $62,414 $1,890,321 $32,947 $231,016 $5,185,544 $142,648
============================================================================================
</TABLE>
See accompanying notes.
6
<PAGE> 11
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DRUG
EMPORIUM
CASH RETIREMENT INCOME AND GROWTH INC.
DEVELOPMENT MANAGEMENT PRESERVATION GROWTH OPPORTUNITIES COMMON LOAN
FUND FUND TRUST FUND FUND STOCK FUND TOTAL
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$167,363 $ -- $ 72,764 $ 169,899 $ 326,623 $ 98,784 $ -- $2,528,380
13,290 -- -- -- -- 3,575 -- 110,067
25,283 208 13,238 12,511 355 -- -- 788,282
(19,458) -- -- 57,053 131,717 140,126 -- 1,080,916
- ----------------------------------------------------------------------------------------------------------------------------------
186,478 208 86,002 239,463 458,695 242,485 -- 4,507,645
5,243 -- 25,293 59,147 116,177 62,759 12,200 861,483
-- -- -- -- -- -- -- 82
- ----------------------------------------------------------------------------------------------------------------------------------
5,243 -- 25,293 59,147 116,177 62,759 12,200 861,565
108,964 (3,430) (998,309) (1,676,267) (3,327,172) (262,730) 145,450 --
-- 3,222 937,600 1,495,951 2,984,654 553,590 105,345 6,080,362
- ----------------------------------------------------------------------------------------------------------------------------------
$290,199 $ -- $ -- $ -- $ -- $ 470,586 $238,595 $9,726,442
==================================================================================================================================
</TABLE>
7
<PAGE> 12
<TABLE>
Drug Emporium, Inc. Employees 401(k) Plan
Statements of Changes in Net Assets Available
for Plan Benefits, with Fund Information
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
----------------------------------------------
CASH RETIREMENT INCOME AND
MANAGEMENT PRESERVATION GROWTH
FUND TRUST FUND
----------------------------------------------
<S> <C> <C> <C>
ADDITIONS
Employee contributions $ 117,786 $ 479,177 $ 689,515
Interest and dividends 5,441 46,881 50,083
Net realized and unrealized
appreciation in fair value
of investments -- -- 57,069
----------------------------------------------
123,227 526,058 796,667
DEDUCTIONS
Benefit payments 71,268 66,293 88,492
----------------------------------------------
71,268 66,293 88,492
----------------------------------------------
Transfers from (to) other funds (146,991) (250,475) 15,802
Net assets available for plan
benefits at beginning of year 98,254 728,310 771,974
----------------------------------------------
Net assets available for plan
benefits at end of year $ 3,222 $ 937,600 $1,495,951
==============================================
</TABLE>
See accompanying notes.
8
<PAGE> 13
<TABLE>
<CAPTION>
- -------------------------------------------------------------
DRUG
EMPORIUM
GROWTH INC.
OPPORTUNITIES COMMON LOAN
FUND STOCK FUND TOTAL
- -------------------------------------------------------------
<S> <C> <C> <C>
$1,203,115 $ -- $ -- $2,489,593
181,145 -- -- 283,550
204,659 13,295 -- 275,023
- -------------------------------------------------------------
1,588,919 13,295 -- 3,048,166
245,620 1,120 1,756 474,549
- -------------------------------------------------------------
245,620 1,120 1,756 474,549
- -------------------------------------------------------------
290,675 23,420 67,569 --
1,350,680 517,995 39,532 3,506,745
- -------------------------------------------------------------
$2,984,654 $553,590 $105,345 $6,080,362
=============================================================
</TABLE>
9
<PAGE> 14
Drug Emporium, Inc. Employees 401(k) Plan
Notes to Financial Statements
December 31, 1997
1. DESCRIPTION OF THE PLAN
The following description of the Drug Emporium, Inc. Employees 401(k) Plan
(Plan) provides only general information. Participants should refer to the
Summary Plan Description for a more complete description of the Plan's
provisions.
GENERAL
The Plan is a defined contribution plan covering all employees of Drug Emporium,
Inc. and its subsidiaries (the Company) who have at least one year of service,
are age twenty-one or older and have worked 1,000 hours or more. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
CONTRIBUTIONS
Participants may contribute up to 15% of annual compensation limited to the
maximum permitted by the Internal Revenue Code. The Company may make
discretionary matching contributions, as approved by the Company's Board of
Directors.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions,
allocations of the Company's discretionary contributions and Plan earnings.
Forfeited balances of terminated participants' nonvested accounts are used to
reduce future company contributions.
VESTING
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the Company contribution portion of their accounts plus
actual earnings thereon is based on years of vesting service. A participant is
100 percent vested after four years of vesting service.
10
<PAGE> 15
Drug Emporium, Inc. Employees 401(k) Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
INVESTMENT OPTIONS
Effective April 1, 1997, the Plan trustee was changed from Merrill Lynch Trust
Company to the current Trustee, Scudder Trust Company. In connection with this
change, investment options available to participants to invest their
contributions were also changed. Prior to April 1, 1997, a participant could
direct contributions in 10% increments in any of the following four investment
options:
o Merrill Lynch Retirement Preservation Trust - Funds are invested in units
of a mutual fund that invests in Guaranteed Investment Contracts, U.S.
Government and U.S. Government agency securities.
o Fidelity Advisor Income and Growth Fund - Funds are invested in shares of
a mutual fund that invests in U.S. Government bonds, corporate bonds and a
diversified selection of common stocks.
o Fidelity Advisor Growth Opportunities Fund - Funds are invested in shares
of a mutual fund that invests in growth, cyclical and value stocks, and
securities convertible to common stocks.
o Drug Emporium, Inc. Common Stock - Funds are invested in shares of Drug
Emporium, Inc., common stock through an investment company.
Beginning April 1, 1997, participants may direct contributions in 5% increments
in any of the following investment options:
o Scudder Stable Value Fund -- A collective investment trust which invests
primarily in high-quality instruments, including guaranteed investment
contracts, bank investment contracts, money market instruments, and
synthetic contracts. These sysnthetic contracts are composed of
triple-A-rated securities and high-quality bond portfolios wrapped by
insurance companies or banks rated AA or higher.
o Scudder Income Fund -- A mutual fund that invests primarily in high-grade
corporate bonds and government securities.
11
<PAGE> 16
Drug Emporium, Inc. Employees 401(k) Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
INVESTMENT OPTIONS (CONTINUED)
o Scudder Pathway Series - Conservative -- A mutual fund that invests in a
mix of other Scudder mutual funds. The portfolio is typically invested
40%-80% in bond funds, 20%-50% in stock funds, and 0%-15% in stable value
funds.
o Scudder Pathway Series - Balanced -- A mutual fund that invests in a mix
of other Scudder mutual funds. The portfolio is typically invested 40%-70%
stock funds, 25%-60% in bond funds, and 0%-10% in stable value funds.
o Scudder Pathway Series - Growth -- A mutual fund that invests in a mix of
other Scudder mutual funds. The portfolio is typically invested 60%-90% in
stock funds, 10%-40% in bond funds, and 0%-5% in stable value funds.
o Scudder Growth and Income Fund -- A mutual fund that primarily invests in
common and preferred stocks and convertible securities of established
companies.
o Scudder International Fund -- A mutual fund that primarily invests in
foreign stocks of established companies.
o Scudder Development Fund -- A mutual fund that typically invests in small,
emerging, or developing companies.
o Drug Emporium, Inc. Common Stock - Funds are invested in shares of Drug
Emporium, Inc., Common Stock through an investment company.
PARTICIPANT LOANS RECEIVABLE
Participants may borrow from their accounts a minimum of $1,000 up to a maximum
of the lesser of $50,000 or 50% of their account balance. Loan transactions are
treated as transfers between the investment funds and the loan fund. Principal
and interest is paid ratably, through bi-weekly payroll deductions.
12
<PAGE> 17
Drug Emporium, Inc. Employees 401(k) Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
DISTRIBUTION OF BENEFITS
Participants, or their beneficiaries, are entitled to receive 100% of their
vested portion of Company contributions and related earnings thereon upon
termination, normal retirement (age 65), early retirement (age 59 1/2), death,
or total and permanent disability.
PLAN TERMINATION
The Company has the right to discontinue and terminate the Plan. In the event of
a termination or partial termination of the Plan, the right of each participant
to benefits accrued to the date of such termination or partial termination shall
be nonforfeitable.
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING AND PRESENTATION
The financial statements of the Plan have been prepared in conformity with
generally accepted accounting principles, which requires the use of management's
estimates, as applied to defined contribution employee benefit plans.
The accounting records of the Plan are maintained on an accrual basis. The Plan
includes participants who are employees of Drug Emporium, Inc. and its
subsidiaries.
ADMINISTRATIVE EXPENSES
Substantially all administrative expenses of the Plan are paid by the Company.
13
<PAGE> 18
Drug Emporium, Inc. Employees 401(k) Plan
Notes to Financial Statements (continued)
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. The shares of mutual funds are
valued at quoted market prices which represent the net asset values of shares
held by the Plan at year-end. The investment in the collective investment trust
is stated at fair value as determined by the Trustee. The participant loans
receivable are valued at cost which approximates fair value. Purchases and sales
of investments are recorded on a trade-date basis. Interest income is recorded
on the accrual basis. Dividends are recorded on the ex-dividend date.
3. INCOME TAX STATUS
With the change in the Plan Trustee effective April 1, 1997, the Company
established a new Plan agreement consisting of a Scudder Prototype 401(k) Plan.
The provisions of the new Plan are similar to the provisions of the prior Plan.
The Internal Revenue Service ruled on January 18, 1995 that the Plan in effect
prior to April 1, 1997 qualified under Section 401(a) of the Internal Revenue
Code (IRC) and, therefore, the related trust was not subject to tax under
present income tax law.
The Plan intends to apply for a determination letter from the Internal Revenue
Service stating that the Scudder Prototype 401(k) Plan adopted effective April
1, 1997 is qualified under Section 401(a) of the IRC. However, the Company
represents that the Plan is qualified and, therefore, is exempt from taxation.
Once qualified, the Plan is required to operate in conformity with the IRC and
ERISA to maintain its tax-exempt status. The Company is not aware of any course
of action or series of events that have occurred that might adversely affect the
Plan's qualified status.
4. TRANSACTIONS WITH PARTIES-IN-INTEREST
At December 31, 1997 and 1996, the Plan owned 118,598 and 126,176 shares of the
Company's common stock, respectively. The Plan purchased 28,102 and 18,573
shares in 1997 and 1996 for $128,426 and $79,364, respectively. The Plan sold
35,680 and 16,726 shares in 1997 and 1996 for $165,198 and $66,672,
respectively. The market value of the Company's common stock at December 31,
1997 and 1996 was based on quoted market values. At December 31, 1997, the
market value of Drug Emporium, Inc. Common Stock was approximately $3.94 per
share. There were no cash dividends received during the years ended December 31,
1997 and 1996 from the Company.
14
<PAGE> 19
<TABLE>
Drug Emporium, Inc. Employees 401(K) Plan
Schedule of Assets Held for Investment Purposes
December 31, 1997
<CAPTION>
IDENTITY OF ISSUE, BORROWER, DESCRIPTION CURRENT
LESSOR OR SIMILAR PARTY OF ASSET COST VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Scudder Stable Value Fund 1,175,056 shares $1,175,056 $1,175,056
Scudder Income Fund 4,354 shares 58,394 58,657
Scudder Pathway Series-Balanced 145,558 shares 1,754,845 1,879,156
Scudder Pathway Series - Conservative 2,387 shares 31,184 30,491
Scudder Pathway Series - Growth 16,577 shares 227,515 219,312
Scudder Growth and Income Fund 187,982 shares 4,589,199 5,137,537
Scudder International Fund 2,921 shares 151,793 133,651
Scudder Development Fund 7,183 shares 297,264 276,909
Drug Emporium Stock 118,598 shares 644,633 467,011
Participant Loans 238,595 par -- 238,595
---------------------------
$8,929,883 $9,616,375
===========================
</TABLE>
15
<PAGE> 20
<TABLE>
Drug Emporium, Inc. Employees 401(K) Plan
Schedule of Reportable Transactions
Year ended December 31, 1997
<CAPTION>
CURRENT
VALUE
OF ASSET ON NET
IDENTITY OF PARTY DESCRIPTION PURCHASE SELLING COST OF TRANSACTION GAIN
INVOLVED OF ASSET PRICE PRICE ASSET DATE (LOSS)
- -----------------------------------------------------------------------------------------------------------------------------------
Category (i) - Individual transactions in a securities issue aggregating in excess of 5% of plan assets.
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Merrill Lynch Fidelity Advisor Income and Growth $ -- $3,377,786 $2,900,346 $3,377,786 $477,440
Fund, 91,688 shares
Merrill Lynch Fidelity Advisor Income and Growth -- 1,616,532 1,486,286 1,616,532 130,246
Fund, 95,304 shares
Merrill Lynch Retirement Preservation Trust, -- 942,474 942,474 942,474 --
942,474 shares
Scudder Trust Company Stable Value Fund, 944,391 shares 944,391 -- 944,391 944,391 --
Scudder Trust Company Pathway Series Balanced, 130,828 1,550,318 -- 1,550,318 1,550,318 --
Scudder Trust Company Growth and Income Fund, 3,359,015 -- 3,359,015 3,359,015 --
143,609 shares
Category (iii) - Series of transactions in a securities issue aggregating in excess of 5% of plan assets.
- ---------------------------------------------------------------------------------------------------------
Merrill Lynch Fidelity Advisor Growth
Opportunities Fund
9 sales, 96,292 shares -- 3,548,041 3,045,461 3,548,041 502,580
11 purchases, 13,459 shares 492,308 -- 492,308 492,308 -
Merrill Lynch Fidelity Advisor Income &
Growth Fund
13 sales, 102,392 shares -- 1,738,410 1,596,455 1,738,410 141,956
10 purchases, 13,016 shares 219,338 -- 219,338 219,338 --
Merrill Lynch Retirment Preservation Trust
12 sales, 1,027,445 shares -- 1,027,445 1,027,445 1,027,445 --
73 purchases, 108,979 shares 108,979 -- 108,979 108,979 --
Scudder Trust Company Stable Value Fund
56 sales, 191,150 shares -- 191,150 191,150 191,150 --
93 purchases, 1,360,006 shares 1,360,006 -- 1,360,006 1,360,006 --
Scudder Trust Company Pathway Series-Balanced
45 sales, 20,377 shares -- 270,850 243,903 270,850 26,947
59 purchases, 166,721 shares 2,009,358 -- 2,009,358 2,009,358 --
Scudder Trust Company Pathway Series-Growth
20 sales, 2,717 shares -- 36,881 35,571 36,881 (690)
54 purchases, 19,268 shares 265,062 -- 265,062 265,062 --
Scudder Trust Company Growth and Income Fund
47 sales, 20,321 shares -- 577,351 482,195 577,351 95,156
71 purchases, 208,695 shares 5,085,661 -- 5,085,661 5,085,661 --
Scudder Trust Company Development Fund
21 sales, 575 shares -- 24,001 23,105 24,001 896
53 purchases, 7,733 shares 320,345 -- 320,345 320,345 --
There were no Category (ii) or (iv) reportable transactions.
- ------------------------------------------------------------
</TABLE>
16
<PAGE> 1
Exhibit 23.1
------------
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-25768) pertaining to the Drug Emporium, Inc. Employees 401(k) Plan of
our report dated June 26, 1998, with respect to the financial statements and
schedules of Drug Emporium, Inc. Employees 401(k) Plan included in this Annual
Report (Form 11-K) for the year ended December 31, 1997.
/s/ Ernst & Young LLP
Columbus, Ohio
June 26, 1998
