SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


   X     Quarterly  report  pursuant  to  Section 13 or 15(d) of the  Securities
-------- Exchange Act of 1934

         For  the quarterly  period ended April 1, 2000  Commission File  Number
         0-27050
         -------

         Transition  report  pursuant  to Section 13 or 15(d) of the  Securities
-------- Exchange Act of 1934 For the transition period from________ to ________


                                 PHAR-MOR, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         PENNSYLVANIA                                          25-1466309
------------------------------------------------           ---------------------
         (State or other jurisdiction of                   (I.R.S. Employer
         incorporation or organization)                    Identification No.)


         20 Federal Plaza West, Youngstown, Ohio            44501-0400
------------------------------------------------           ---------------------
         (Address of principal executive offices)          (Zip code)


Registrant's telephone number, including area code:        (330) 746-6641
                                                           --------------

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                            YES      X        No
                                                   -----           -----

         Indicate by check mark whether the  registrant  has filed all documents
and reports  required to be filed by Sections 12, 13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.

                                            YES      X        No
                                                   -----           -----


On April 13, 2000, there were 12,240,865 shares of the registrant's common stock
outstanding  before  deducting  1,207,979  shares which  represent the Company's
25.2% equity interest in common stock of the Company owned by Avatex, Inc.



<PAGE>2


                         PHAR-MOR, INC. AND SUBSIDIARIES

                                    FORM 10-Q

                       FOR THE QUARTER ENDED APRIL 1, 2000


                                    I N D E X


                                                                           Page
--------------------------------------------------------------------------------
Part I:  Financial Information

         Item 1.  Financial Statements

              Condensed Consolidated Balance Sheets as of  April 1,
              2000 and July 3, 1999                                           3

              Condensed Consolidated Statements of Operations for the
              Thirteen Weeks Ended April 1, 2000 and March 27, 1999           4

              Condensed Consolidated Statements of Operations for the
              Thirty-nine Weeks Ended April 1, 2000 and March 27, 1999        5

              Condensed Consolidated Statements of Cash Flows for the
              Thirty-nine Weeks Ended April 1, 2000 and March 27, 1999        6

              Notes to Condensed Consolidated Financial Statements            7

         Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                                  9

Part II: Other Information

         Item 1.  Legal Proceedings                                          13
         Item 2.  Changes in Securities                                      13
         Item 3.  Defaults Upon Senior Securities                            13
         Item 4.  Submission of Matters to a Vote of Security Holders        13
         Item 5.  Other Information                                          13
         Item 6.  Exhibits and Reports on Form 8-K                           13
         Signatures                                                          14
         Exhibit Index                                                       15


<PAGE>3

<TABLE>
<CAPTION>

                         PHAR-MOR, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

ASSETS                                                   (Unaudited)
                                                           April 1,     July 3,
                                                             2000         1999
                                                             ----         ----
<S>                                                      <C>          <C>
Current assets:
  Cash and cash equivalents                              $  15,593    $  17,346
  Marketable securities                                       --          3,254
  Accounts receivable - net                                 27,962       28,293
  Merchandise inventories                                  216,772      218,945
  Prepaid expenses and other current assets                  6,679        7,418
                                                           -------      -------
          Total current assets                             267,006      275,256

Property and equipment - net                                92,757       93,738
Goodwill                                                    15,761       16,234
Deferred tax asset                                           7,734        9,049
Investments                                                 25,341        8,314
Investment in Avatex                                         4,084         --
Other assets                                                 4,530        5,133
                                                           -------      -------

          Total assets                                   $ 417,213    $ 407,724
                                                         =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:
  Accounts payable                                       $  98,511    $ 119,843
  Accrued expenses and other current liabilities            39,369       37,104
  Current portion of long-term debt and capital lease
    obligations                                              6,559        8,946
                                                           -------      -------
          Total current liabilities                        144,439      165,893

Long-term debt and capital lease obligations               173,536      142,947
Long-term self insurance reserves                            8,047        8,032
Deferred rent and unfavorable lease liability - net         10,587       11,073
                                                           -------      -------
          Total liabilities                                336,609      327,945
                                                           -------      -------

Commitments and contingencies                                 --           --
Minority interests                                             535          535
                                                           -------      -------

Stockholders' equity:
  Preferred stock                                             --           --
  Common stock                                                 122          122
  Additional paid-in capital                                90,007       90,007
  Stock options outstanding                                  2,200        2,105
  Retained deficit                                          (5,901)      (7,989)
                                                           -------      -------
                                                            86,428       84,245
  Less: equity in cost of common stock of the Company
    held by Avatex, Inc                                     (6,359)      (5,001)
                                                           -------      -------
        Total stockholders' equity                          80,069       79,244
                                                           -------      -------

        Total liabilities and stockholders' equity       $ 417,213    $ 407,724
                                                         =========    =========
</TABLE>



     The accompanying notes are an integral part of these condensed consolidated
     financial statements.


<PAGE>4

<TABLE>
<CAPTION>


                         PHAR-MOR, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                (Dollars in thousands, except per share amounts)
                                   (Unaudited)

                                                                  Thirteen        Thirteen
                                                                 Weeks Ended    Weeks Ended
                                                                April 1, 2000  March 27, 1999
                                                                -------------  --------------

<S>                                                            <C>             <C>
Sales                                                          $    308,663    $    290,928

Less:
  Cost of goods sold, including occupancy and
      distribution costs                                            254,103         235,910
  Selling, general and administrative expenses                       50,635          44,388
  Depreciation and amortization                                       5,741           6,086
                                                               ------------    ------------
(Loss) income from operations before interest expense,
  interest income, investment income, equity in loss of
  affiliates, income taxes and extraordinary gain                    (1,816)          4,544

Interest expense                                                     (4,672)         (3,877)
Interest income                                                          91             797
Investment income                                                     2,839             483
                                                               ------------    ------------
(Loss) income before equity in loss of affiliates, income
  taxes and extraordinary gain                                       (3,558)          1,947

Equity in loss of affiliates                                           (281)            --
                                                               ------------    ------------
(Loss) income before income taxes and extraordinary gain             (3,839)          1,947

Income taxes                                                         (1,536)            780
                                                               ------------    ------------
(Loss) income before extraordinary gain                              (2,303)          1,167

Extraordinary gain on extinguishment of debt - net of
  $310 tax                                                              464             --
                                                               ------------    ------------
Net (loss) income                                              $     (1,839)   $      1,167
                                                               ============    ============
(Loss) income per basic common share:
  (Loss) income before extraordinary gain                      $       (.21)   $        .10
  Extraordinary gain                                                    .04            --
                                                               ------------    ------------
  Net (loss) income                                            $       (.17)   $        .10
                                                               ============    ============
(Loss) income per diluted common share:
  (Loss) income before extraordinary gain                      $       (.21)   $        .10
  Extraordinary gain                                                    .04            --
                                                               ------------    ------------
  Net (loss) income                                            $       (.17)   $        .10
                                                               ============    ============

Weighted average number of basic common shares outstanding       11,032,886      11,516,185
Weighted average number of diluted common shares outstanding     11,032,886      11,592,371

</TABLE>

     The accompanying notes are an integral part of these condensed consolidated
     financial statements.


<PAGE>5

<TABLE>
<CAPTION>


                         PHAR-MOR, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                (Dollars in thousands, except per share amounts)
                                   (Unaudited)


                                                                 Thirty-nine     Thirty-nine
                                                                 Weeks Ended     Weeks Ended
                                                                April 1, 2000   March 27, 1999
                                                                -------------   --------------

<S>                                                             <C>             <C>
Sales                                                           $    976,909    $    857,329

Less:
 Cost of goods sold, including occupancy and
      distribution costs                                             791,236         692,792
  Selling, general and administrative expenses                       158,083         130,444
  Depreciation and amortization                                       19,008          17,507
                                                                ------------    ------------
Income from operations before interest expense, interest
  income, investment income (loss), equity in loss of
  affiliates, income taxes and extraordinary gain                      8,582          16,586

Interest expense                                                     (14,110)        (11,761)
Interest income                                                          111           1,568
Investment income (loss)                                               8,061            (721)
                                                                ------------    ------------
Income before equity in loss of affiliates, income taxes and
  extraordinary gain                                                   2,644           5,672

Equity in loss of affiliates                                            (281)            --
                                                                ------------    ------------
Income before income taxes and extraordinary gain                      2,363           5,672

Income taxes                                                             945           2,270
                                                                ------------    ------------
Income before extraordinary gain                                       1,418           3,402

Extraordinary gain on extinguishment of debt- net of $447 tax            670             --
                                                                ------------    ------------
Net income                                                      $      2,088    $      3,402
                                                                ============    ============
Income per basic common share:
  Income before extraordinary gain                              $        .12    $        .30
  Extraordinary gain                                                     .06            --
                                                                ------------    ------------
  Net income                                                    $        .18    $        .30
Income per diluted common share:
  Income before extraordinary gain                              $        .12    $        .29
  Extraordinary gain                                                     .06            --
                                                                ------------    ------------
  Net income                                                    $        .18    $        .29
                                                                ============    ============


Weighted average number of basic common shares outstanding        11,310,827      11,524,813
Weighted average number of diluted common shares outstanding      11,310,827      11,590,616

</TABLE>

     The accompanying notes are an integral part of these condensed consolidated
     financial statements.


<PAGE>6

<TABLE>
<CAPTION>


                         PHAR-MOR, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)

                                                            Thirty-nine     Thirty-nine
                                                            Weeks Ended     Weeks Ended
                                                           April 1, 2000   March 27, 1999
                                                           -------------   --------------

<S>                                                             <C>         <C>
OPERATING ACTIVITIES
  Net income                                                    $  2,088    $  3,402
  Adjustments to reconcile net income to net
   cash provided by(used for) operating activities:
    Items not requiring the outlay of cash:
      Depreciation                                                13,894      11,813
      Amortization of video rental tapes                           4,101       5,374
      Stock option expense                                            95         549
      Amortization of deferred financing costs and goodwill        1,211         183
      Deferred income taxes                                        1,392       2,270
      Deferred rent                                                 (486)       (483)
      Gain on other investment                                    (8,721)       (735)
      Equity in loss of affiliates                                   281        --
      Gain on extinguishment of debt                              (1,117)       --
    Changes in assets and liabilities:
      Accounts receivable                                            287        (586)
      Marketable securities                                        3,254       5,596
      Merchandise inventories                                       (792)    (15,271)
      Prepaid expenses                                               662         586
      Other assets                                                  (135)        (21)
      Accounts payable                                           (17,070)     (5,711)
      Accrued expenses and other current liabilities               2,295      (9,960)
                                                                --------    --------
  Net cash provided by (used for) operating activities             1,239      (2,994)
                                                                --------    --------

INVESTING ACTIVITIES
  Additions to rental videotapes                                  (1,136)     (6,000)
  Additions to property and equipment                            (12,949)    (18,631)
  Proceeds on sale of property and equipment                          33         110
  Investment in Avatex                                            (5,724)     (1,000)
  Investment in Pharmhouse Corp., net of $3,292 cash acquired       --        (4,608)
  Proceeds from sale of equity securities                          3,000        --
  Investment in equity securities                                (11,261)     (2,291)
                                                                --------    --------
  Net cash used for investing activities                         (28,037)    (32,420)
                                                                --------    --------

FINANCING ACTIVITIES
  Borrowings under revolving credit facility                      45,053      20,050
  Bank overdrafts                                                 (4,274)     21,687
  Principal payments on long-term debt                           (10,184)    (28,959)
  Principal payments on capital lease obligations                 (5,550)     (5,280)
  Additions to long-term debt                                       --           250
  Issuance of common stock                                          --            31
                                                                --------    --------
  Net cash provided by (used for) financing activities            25,045       7,779
                                                                --------    --------

  Decrease in cash and cash equivalents                           (1,753)    (27,635)
  Cash and cash equivalents, beginning of period                  17,346      44,655
                                                                --------    --------
  Cash and cash equivalents, end of period                      $ 15,593    $ 17,020
                                                                ========    ========
</TABLE>

The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements.


<PAGE>7


PHAR-MOR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
--------------------------------------------------------------------------------

1.       BASIS OF PRESENTATION
         The accompanying  unaudited  interim condensed  consolidated  financial
         statements  have been prepared in accordance  with  generally  accepted
         accounting  principles for interim financial  information.  They do not
         include  all  information  and  footnotes  which  would be  required by
         generally  accepted   accounting   principles  for  complete  financial
         statements.  In the  opinion  of  management  of  Phar-Mor,  Inc.  (the
         "Company") and its  subsidiaries,  these interim  financial  statements
         contain all adjustments considered necessary for a fair presentation of
         financial  position,  results  of  operations  and cash  flows  for the
         periods  presented.  Reference  should be made to the Company's  Annual
         Report  on Form  10-K  for the  fiscal  year  ended  July 3,  1999  for
         additional disclosures, including a summary of the Company's accounting
         policies, which have not changed. Operating results for the thirty-nine
         weeks ended April 1, 2000 are not necessarily indicative of the results
         that may be expected for the fifty-two weeks ending July 1, 2000.

2.       NEW ACCOUNTING PRONOUNCEMENTS
         In June 1998, the Financial  Accounting Standards Board ("FASB") issued
         Statement of Accounting  Standards  ("SFAS") No. 133,  "Accounting  for
         Derivative  Instruments  and  Hedging  Activities,"  which  establishes
         accounting and reporting  standards for derivative  instruments and for
         hedging   activities.   It  requires  that  an  entity   recognize  all
         derivatives  as  either  assets  or  liabilities  in the  statement  of
         financial  position and measure those  instruments at fair value,  with
         the potential  effect on operations  dependent upon certain  conditions
         being met.  SFAS No. 133 (as amended by SFAS No. 137) is effective  for
         all fiscal  quarters of fiscal  years  beginning  after June 15,  2000.
         Management does not believe that the adoption of SFAS No. 133 will have
         a material impact on its financial position or results of operations.

3.       LITIGATION
         The Company and its  subsidiaries  are  involved in legal  proceedings,
         claims and litigation  arising in the ordinary  course of business.  In
         the  opinion  of   management,   the  outcome  of  such  current  legal
         proceedings,  claims and litigation  will not have a material impact of
         the Company's consolidated financial position or results of operations.

4.       INVESTMENT IN AVATEX
         On  December  6, 1999,  the  Company  invested  $5,724 to  purchase  an
         additional  2,862,400  shares of Avatex  common stock,  increasing  its
         investment  from  15.1%  to  approximately   25.2%  of  Avatex's  total
         outstanding common stock.  Accordingly,  the Company changed its method
         of accounting for the investment  from cost to equity basis as required
         by  generally  accepted  accounting   principles  and  treats  Avatex's
         investment  in the Company's  common stock  similar to treasury  stock,
         with a reduction in the number of shares  outstanding  for  calculating
         earnings per share of  1,207,979.  The  financial  statements  of prior
         years have been  restated to reflect the adoption of the equity  method
         in  a  manner  consistent  with  the  accounting  of  a  step  by  step
         acquisition of Avatex.  The effect of the  restatement  was to increase
         net income for fiscal 1999 by $2,188,  eliminate  comprehensive  income
         (loss)  for all  prior  periods  and  reclassify  all of the  Company's
         investment in Avatex common stock prior to fiscal 2000 from  Investment
         in Avatex to Equity  in cost of  common  stock of the  Company  held by
         Avatex, Inc. on the Condensed Consolidated Balance Sheets.

         The Company's  investment in Avatex includes the unamortized  excess of
         the Company's  investment  over its equity in Avatex's net assets.  The
         original excess was $3,628 at January 1, 2000 and is being amortized on
         a straight-line basis over 20 years.

<PAGE>8

5.       BUSINESS COMBINATION
         On March 15, 1999, Phar-Mor,  Inc. ("Phar-Mor") completed the merger of
         its wholly owned subsidiary Pharmacy Acquisition Corp. ("PAC") with and
         into  Pharmhouse  Corp.  ("Pharmhouse"),  pursuant to the Agreement and
         Plan of Merger  dated as of December 17, 1998 among  Phar-Mor,  PAC and
         Pharmhouse  (the  "Merger  Agreement").  As  a  result  of  the  merger
         Pharmhouse  became a wholly owned subsidiary of Phar-Mor.  In addition,
         subject to the terms of the Merger Agreement,  each share of the common
         stock of Pharmhouse  was converted  into the right to receive $2.88 per
         share in cash (the "Merger").

         Phar-Mor and PAC  financed  the payment of the  purchase  price and all
         other fees and expenses  associated  with the Merger  through cash from
         operations and from  borrowings  under the Company's  revolving  credit
         facility.

         The Merger was accounted for under the purchase  method of  accounting.
         The results of  operations  of  Pharmhouse  from March 16, 1999 through
         March  27,  1999  have  been  included  in the  Condensed  Consolidated
         Statements of Operations  for both the thirteen and  thirty-nine  weeks
         ended March 27, 1999.  The total  purchase  price payable in connection
         with the Merger was  approximately  $34.2  million,  consisting of $7.5
         million in cash and the  assumption of $26.7 million in debt.  Goodwill
         is being amortized using the  straight-line  method over a period of 25
         years.  The fair value of the assets acquired and  liabilities  assumed
         was as follows:

                        Identifiable assets acquired                    $54,962
                        Liabilities                                     (61,954)
                        Goodwill                                         14,866
                                                                        -------
                        Cash                                            $ 7,874
                                                                        =======



<PAGE>9


PHAR-MOR,  INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

RESULTS OF OPERATIONS (all dollar amounts in thousands)

Thirteen Weeks Ended April 1, 2000 versus
    Thirteen Weeks Ended March 27, 1999

Sales for the third quarter of fiscal year 2000 ("Fiscal  2000")  increased 6.1%
compared to the third quarter of fiscal year 1999 ("Fiscal 1999")  primarily due
to the  acquisition  of the 32  Pharmhouse  stores which were  acquired in March
1999.  Comparable  store sales  decreased  5.1% from $281,574 for Fiscal 1999 to
$267,156 for Fiscal 2000.  Comparable  store sales were impacted by the shift of
Easter to the third week in April in Fiscal 2000 from the first week in April in
Fiscal 1999,  21 days of inclement  weather in Fiscal 2000 and a much milder and
shorter flu season in Fiscal 2000.  Comparable  store pharmacy  sales  increased
4.2% in Fiscal 2000.

Cost of sales as a  percentage  of sales was 82.3% in Fiscal  2000  compared  to
81.1% in Fiscal 1999,  an increase of 1.2% of sales.  The increase was primarily
due to a  reduction  in video  rental  tape  sales and gross  margin  due to the
elimination of underperforming  video rental departments in approximately 50% of
the stores and a reduction in the amount of video rental tapes  purchased in the
continuing video rental  departments,  a $2,505 partial  settlement  received in
Fiscal 1999 from a class action lawsuit  against  pharmaceutical  manufacturers,
related to certain product overcharges, combined with a full three months of the
higher store occupancy charges in the Pharmhouse stores as a percentage of sales
in Fiscal 2000  compared to two weeks of Pharmhouse  results  included in Fiscal
1999.

Selling, general and administrative expenses as a percentage of sales were 16.4%
in Fiscal 2000  compared to 15.3% in Fiscal 1999,  an increase of 1.1% of sales.
This  increase  was  primarily  due to higher  wages and other  store  operating
expenses as a percentage of sales partially  offset by lower corporate  expenses
as a percentage of sales.  The increase in wages was due to the inclusion of the
lower volume  Pharmhouse  stores and a 5.8% increase in the average  hourly rate
paid to store level  employees.  The market for pharmacists is very  competitive
and as a result the average hourly rate paid to  pharmacists  has increased 8.2%
over the past year.  The  increase in other  expenses was  primarily  due to the
inclusion of a full quarter of the lower volume Pharmhouse stores.

Depreciation  and  amortization  expense was $5,741 in Fiscal  2000  compared to
$6,086 in Fiscal 1999, a decrease of $345.  Depreciation  expense increased $499
as a result of an increase in  depreciation on capital  expenditures  made since
the third quarter of Fiscal 1999 and the  depreciation on the assets acquired in
the  Pharmhouse  acquisition.  Amortization  of goodwill  and other  intangibles
increased $206 as a result of the assets acquired in the Pharmhouse acquisition.
These  increases  were  more  than  offset by a $1,050  decrease  in video  tape
amortization  due to  the  closure  of  approximately  one  half  of its  poorer
performing  video rental  departments in the past year combined with lower video
rental tape purchases in continuing video rental departments.

Interest  income was $91 in Fiscal 2000  compared to interest  income of $797 in
Fiscal  1999,  a $706  decrease.  The  decrease in interest  income was due to a
decrease in the amount of excess funds available for investment in Fiscal 2000.

Investment  income was $2,839 in Fiscal 2000  compared to  investment  income of
$483 in Fiscal 1999, a $2,356  increase.  The increase was  primarily  due to an
increase  in the  value of the  Company's  limited  partnership  interest  in an
investment partnership.

The Company  repurchased $7,039 of its 11.72% senior notes during Fiscal 2000 at
a discount that resulted in a pretax extraordinary gain of $774.



<PAGE>10


Thirty-nine Weeks Ended April 1, 2000 versus
    Thirty-nine Weeks Ended March 27, 1999

Sales for the  thirty-nine  weeks ended April 1, 2000 increased 14.0% due to the
acquisition  of the 32  Pharmhouse  stores  which were  acquired  in March 1999.
Comparable  store sales increased 0.5% from $841,064 for the  thirty-nine  weeks
ended March 27, 1999 to $844,943 for the thirty-nine  weeks ended April 1, 2000.
The increase in comparable  store sales was  primarily due to a 8.0%  comparable
store pharmacy sales increase.

Cost of sales as a percentage of sales was 81.0% in the thirty-nine  weeks ended
April 1, 2000,  compared to 80.8% in the thirty-nine weeks ended March 27, 1999,
a 0.2%  increase.  The increase was primarily due to a reduction in video rental
tape  sales  and gross  margin,  a $2,505  partial  settlement  received  in the
thirty-nine  weeks  ended  March 27, 1999 from a class  action  lawsuit  against
pharmaceutical manufacturers,  related to certain product overcharges,  combined
with a full nine months of the higher store occupancy  charges in the Pharmhouse
stores as a percentage of sales in compared to two weeks of  Pharmhouse  results
included  in the  thirty-nine  weeks of the prior  year.  These  increases  were
partially  offset by  increased  vendor  income  related to the  remerchandising
activities  in the  Pharmhouse  stores.  In the  last  year the  Company  closed
approximately  one half of its poorer  performing  video rental  departments and
liquidated the video rental tape inventory in those stores.

Selling, general and administrative expenses as a percentage of sales were 16.2%
in  the  thirty-nine  weeks  ended  April  1,  2000  compared  to  15.2%  in the
thirty-nine  weeks ended March 27,  1999.  This  increase was  primarily  due to
higher wages,  advertising and other store operating expenses as a percentage of
sales due to the  inclusion  of the lower  volume  Pharmhouse  stores  partially
offset by lower corporate expenses as a percentage of sales.

Depreciation and amortization expense was $19,008 in the thirty-nine weeks ended
April 1, 2000 compared to $17,507 in the thirty-nine weeks ended March 27, 1999,
an increase of $1,501.  The  increase is the result of  depreciation  on capital
expenditures  made since the second quarter of Fiscal 1999 and the  depreciation
and amortization on the assets acquired in the Pharmhouse acquisition,  partialy
offset by a $1,287  decrease  in video tape  amortization  due to the closure of
approximately one half of its poorer performing video rental  departments in the
past year  combined with lower video rental tape  purchases in continuing  video
rental departments.

Interest income was $111 in the  thirty-nine  weeks ended April 1, 2000 compared
to interest  income of $1,568 in the  thirty-nine  weeks ended March 27, 1999, a
$1,457  decrease.  The decrease in interest  income was due to a decrease in the
amount of excess funds available for investment in the  thirty-nine  weeks ended
April 1, 2000.

Investment  income  was  $8,061 in the  thirty-nine  weeks  ended  April 1, 2000
compared to an investment loss of $721 in the thirty-nine  weeks ended March 27,
1999, a $8,782  increase.  The increase was  primarily due to an increase in the
value  of  the  Company's   limited   partnership   interest  in  an  investment
partnership.

<PAGE>11

The  Company   repurchased  $10,149  of  its  11.72%  senior  notes  during  the
thirty-nine  weeks ended April 1, 2000 at a discount  that  resulted in a pretax
extraordinary gain of $1,117.

FINANCIAL CONDITION AND LIQUIDITY (all dollar amounts in thousands)

The Company's cash position as of April 1, 2000 was $15,593.  The Company's cash
position may fluctuate as a result of seasonal merchandise  purchases and timing
of payments.

The Company entered into an Amended and Restated  Revolving Credit Facility (the
"Amended Facility")  effective September 10, 1998 with BABC, as agent, and other
financial  institutions that establishes a credit facility in the maximum amount
of $100,000.

Borrowings  under the Amended Facility may be used for working capital needs and
general  corporate  purposes.  Up to $50,000 of the Amended Facility at any time
may be used for standby and documentary  letters of credit. The Amended Facility
includes  restrictions  on, among other things,  additional  debt,  investments,
dividends  and other  distributions,  mergers and  acquisitions  and contains no
financial covenants.

Credit  availability under the Amended Facility at any time is the lesser of the
aggregate  availability  (as defined in the Amended  Facility) or $100,000.  The
Amended Facility  establishes a first priority lien and security interest in the
current  assets of the Company,  including,  among other items,  cash,  accounts
receivable and inventory.

Advances  made under the  Amended  Facility  bear  interest  at the  BankAmerica
reference  rate plus 1/2% or LIBOR plus  2.00%.  Under the terms of the  Amended
Facility,  the Company is required to pay a commitment  fee of between 0.25% and
0.35% per annum on the unused portion of the facility, letter of credit fees and
certain other fees.

Unused  availability under the Amended Facility,  after subtracting amounts used
for outstanding letters of credit, was $29,797 at April 1, 2000.

The Amended Facility expires on March 14, 2002.

Thirty-nine weeks ended April 1, 2000

During the  thirty-nine  weeks ended April 1, 2000,  the Company's cash position
decreased by $1,753.  Net cash provided by operating  activities was $1,239. The
major  sources  of cash from  operating  activities  were net  income of $2,088,
depreciation  expense of $13,894,  amortization of video rental tapes of $4,101,
decrease in marketable  securities of $3,254 and an increase in accrued expenses
and other current liabilities of $2,295 offset by a decrease in accounts payable
of $17,070.

Capital  expenditures of $12,949,  additions to video rental tapes of $1,136, an
investment in equity  securities of $11,261 and an additional  $5,724 investment
in Avatex were paid for with $3,000 proceeds from the sale of equity  securities
in the  Company's  investment  partnership  and  borrowings  under the Company's
revolving credit facility.

Net cash  provided by financing  activities  of $25,045  consisted of borrowings
under the  revolving  credit  facility  partially  offset by  decreases  in bank
overdrafts,  principal  payments on lease obligations and principal  payments on
long-term debt.

The  Company  is  exposed to certain  market  risks from  transactions  that are
entered into during the normal course of business. The Company's policies do not
permit active trading of, or speculation in, derivative  financial  instruments.
The Company's  primary  market risk exposure  relates to interest rate risk. The
Company manages its interest rate risk in order to balance its exposure  between
fixed and variable rates while attempting to minimize its interest costs.

<PAGE>12

Trends,  Demands,  Commitments,  Events or Uncertainties  (all dollar amounts in
thousands)

Certain  Company  information  systems  had  potential  operational  problems in
connection  with  applications  that  contain  a date  and/or  use a  date  in a
comparative  manner as the date  transitions  into the Year  2000.  The  Company
implemented a comprehensive program to identify and remediate potential problems
related to the Year 2000 in its information systems,  infrastructure,  logistics
and retail facilities.  In addition,  the Company initiated formal communication
with all of its significant  vendors and other external  interfaces to determine
the extent to which the Company was  vulnerable  to a  third-party's  failure to
remediate their own potential  problems  related to the Year 2000. The inability
of the Company or significant  vendors and/or external interfaces of the Company
to  adequately  address  Year 2000 issues  could have caused  disruption  of the
Company's systems.

The Company  completed all of the software  modifications  necessary to make its
systems  Year  2000  compliant  and as a result  has not  experienced  any major
operational problems or disruptions.

The Company  incurred  approximately  $1,300  related to the  assessment of, and
efforts in connection  with,  its Year 2000 program and  remediation  plan.  The
Company  accelerated  by one  year  the  purchase  of  approximately  $5,000  in
replacement  hardware  in order to ensure  the  associated  system was Year 2000
compliant.

In June  1998,  the  FASB  issued  SFAS  No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities," which establishes  accounting and reporting
standards for derivative  instruments  and for hedging  activities.  It requires
that an entity  recognize all derivatives as either assets or liabilities in the
statement of financial  position and measure  those  instruments  at fair value,
with the potential effect on operations  dependent upon certain conditions being
met.  SFAS No. 133 (as  amended  by SFAS No.  137) is  effective  for all fiscal
quarters of fiscal  years  beginning  after June 15, 2000.  Management  does not
believe  that the  adoption  of SFAS No. 133 will have a material  impact on its
financial position or results of operations.



<PAGE>13


PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

                  None.

ITEM 2.  CHANGES IN SECURITIES

                  None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

                  None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                  None.

ITEM 5.  OTHER INFORMATION

                  None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

                  See Exhibit Index on page 15.

         (b)      Reports on Form 8-K

                  The  following  reports  on  Form  8-K  were  filed  with  the
                  Securities  and Exchange  Commission  during the quarter ended
                  April 1, 2000

                  None.




<PAGE>14



                                   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 thereunto duly authorized.




                                 PHAR-MOR, INC.


Date:  May 11, 2000                    By:   /s/ Sankar Krishnan
                                         -----------------------
                                                 Sankar Krishnan
                                                 Senior Vice President and Chief
                                                   Financial Officer



Date:  May 11, 2000                   By:   /s/ John R. Ficarro
                                        -----------------------
                                                John R. Ficarro
                                                Senior Vice President and Chief
                                                   Administrative Officer

<PAGE>15




                                 PHAR-MOR, INC.

                                INDEX TO EXHIBITS


Exhibit No.

*3.1              Amended and Restated Articles of Incorporation

**3.2             Amended and Restated By-laws

*4.1              Indenture dated  September 11, 1995 between Phar-Mor, Inc. and
                  IBJ Schroder Bank & Trust Company

*4.2              Warrant Agreement dated September 11, 1995 between Phar-Mor,
                  Inc. and Society National Bank

***10.1           Loan and Security  Agreement,  dated as of September 10, 1998,
                  by  and  among  the  financial   institutions  listed  on  the
                  signature pages therein, BankAmerica Business Credit, Inc., as
                  agent, and Phar-Mor,  Inc.,  Phar-Mor,  Inc., LLC, Phar-Mor of
                  Delaware,  Inc., Phar-Mor of Florida,  Inc., Phar-Mor of Ohio,
                  Inc.,  Phar-Mor of Virginia,  Inc., and Phar-Mor of Wisconsin,
                  Inc.

27                Financial Data Schedule
--------------------------------------------------------------------------------
*        Previously filed in connection with the filing of Phar-Mor's Form 10,
         on October 23, 1995

**       Previously filed in connection with the filing of Phar-Mor's quarterly
         report on Form 10-Q, on May 1, 1998

***      Previously filed in connection with the filing of Phar-Mor's quarterly
         report on Form 10-Q, on November 2, 1998