More.com Takes Aim at Rivals with Offline Alliance

In what is fast becoming a major industry trend, online drugstore More.com, Inc. announced today that it will become the exclusive e-commerce partner for discount brick-and-mortar pharmacy chain Phar-Mor, Inc.

The new partnership comes on the heels of similar arrangements between Healtheon/WebMD and CVS pharmacies, and Drugstore.com and Rite Aid. In addition, brick-and-mortar pharmacies like Walgreens are operating online, which further cements the trend toward online ordering and physical pick-up.

Beginning this spring, Phar-Mor will begin shifting its online customers to More.com’s e-commerce site, which will sell beauty, health, and wellness products. The online pharmacy will also feature specialty shops for contact lenses and same-day prescription services.

Win/Win Deal

By establishing a strong brick-and mortar presence through Phar-Mor’s 139 locations, More.com plans to vigorously compete with Drugstore.com and PlanetRx.com, Inc. by offering prescription pick-up at any of Phar-Mor’s locations.

“Phar-Mor customers will see a tremendous value in this relationship,” said Eric Budin, co-founder and vice president of corporate development of More.com. “By providing More.com’s selection, convenience and savings to Phar-Mor customers, as well as greatly expanding More.com’s universe of brick-and-mortar prescription pick-up options, this partnership is ultimately a consumer victory.”

A Lift for Phar-Mor

As part of the partnership, Phar-Mor will promote the e-commerce site throughout its retail store locations. The company will launch a print advertising campaign to generate maximum consumer awareness about the new online store, as well as feature the URL on prescription and shopping bags, receipts, in-store signage, circulars and other promotional material throughout its stores.

Rapidly Transforming Into Brick-and-Click

More.com has been actively attempting to transform itself into a formidable brick-and-click contender. Late last year, the e-tailer entered into an agreement with Begen Brunswig Co., which includes an alliance with 2,000 independent drugstores that are part of the Good Neighbor Pharmacy network.

About Phar-Mor

Phar-Mor (Nasdaq: PMOR) operates more than 139 drugstores in 24 states under under the Phar-Mor, Pharmhouse and The Rx Place banners. In its fiscal year ending June 1999, Phar-Mor lost $1.6 million (US$) on revenue of $1.2 billion.

The chain, which is concentrated mainly in Pennsylvania, Ohio, and Virginia, also sells vitamins via its Web site. Phar-Mor promotes daily discounts of up to 50 percent, sells beer and wine, and rents videos. Its Super Phar-Mor stores also sell fresh and frozen food.

About More.com

San Francisco, California-based More.com was founded in November 1997. The host of heavy hitter venture firms that have invested in the startup include Boston Millennia Partners, Galen Partners, Health Business Partners, HealthCare Ventures, J&W Seligman & Co. Incorporated, Rho Management, Sculley Brothers, SOFTBANK Technology Ventures, Star Ventures, Swander Pace Capital and 21st Century Internet Venture Partners.