Perry: gains on many fronts

Drug Store News, April 5, 1993

DETROIT - Bolstered by improving earnings and lower debt, Perry Drug Stores plans to finish its chainwide rollout of POS systems and a new, automated receiving system this year, top officers said at the company's annual meeting here.

"We have installed POS systems in more than one third of our stores and expect to complete chainwide installation by the end of this year," executive vice president and new chief operating officer Andy Giancammilli told shareholders March 9. "We are starting the installation of a direct store delivery computer system which ties all deliveries into our accounts payable department, resulting in tighter controls. "

Perry is also nearing chainwide completion of its "Store of the '90s" remodeling program, he revealed, with 85 percent of its 209 stores already renovated and the remainder slated for renovation by next year. Also in the works: Sensormatic EAS (electronic article surveillance) systems, already in 40 percent of Perry's stores, to better control shrink.

The store automation efforts "will bring us faster and more convenient checkout procedures; stronger cost, inventory and margin controls; and permit us to adjust price changes more rapidly," Giancamilli said.

Standing in for chairman and chief executive officer Jack Robinson, who is recovering from surgery, Giancamilli and chief executive officer Jerry Stone outlined the company's plans to spend $5 million this year on those and other programs aimed at building market share and productivity. The money will also go toward "seven new or acquired stores" in Michigan, said Stone.

Perry opened its capital spending coffers another notch after racking up sales of $674 million, net earnings of $8.3 million and same-store sales gains of 10 percent in fiscal 1992. Perry's profitability hit a snag in the first quarter of fiscal 1993, with net income dropping to $562,000 vs. $2.5 million for the same period last year.

However, those results include a one-time charge against earnings of $3.5 million related to the sale of 16 former Perry units in Chicago in 1991 to entrepreneur Fred Barney and other investors for a sum of $7.5 million.

Without the charge, first-quarter net profit would have totaled $3.0 million.

Stone said Perry's pharmacy sales grew 14 percent in the first quarter and accounted for 51 percent of total sales in the fourth quarter of '92. Higher-margin generics account for 41 percent of scripts, and 70 percent of Perry scripts are paid by a third party.

Perry's sales per square foot now average $378 and per-store sales $5.3 million.

Giancamilli noted the chain's private label program includes more than 1,200 Perry brand items which comprise about 15 percent of total general merchandise sales.