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 March 31, 2001  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 30, 2001, there were 12,240,865 shares of the registrant's common stock
outstanding before deducting 1,453,796 shares, which represents 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 MARCH 31, 2001


                                    I N D E X


                                                                            Page
                                                                            ----
Part I:  Financial Information

         Item 1.  Financial Statements

              Condensed Consolidated Balance Sheets as of March 31, 2001
              and July 1, 2000                                                3

              Condensed Consolidated Statements of Operations for the
              Thirteen Weeks Ended March 31, 2001 and April 1, 2000           4

              Condensed Consolidated Statements of Operations for the
              Thirty-nine Weeks Ended March 31, 2001 and April 1, 2000        5

              Condensed Consolidated Statements of Cash Flows for the
              Thirty-nine Weeks Ended March 31, 2001 and April 1, 2000        6

              Notes to Condensed Consolidated Financial Statements            7

         Item 2.  Management's Discussion and Analysis of Financial
              Condition and Results of Operations                             8

         Item 3.  Quantitative and Qualitative Disclosures about Market Risk
                   (No Significant Change)

Part II: Other Information

         Item 1.  Legal Proceedings                                          12
         Item 2.  Changes in Securities                                      12
         Item 3.  Defaults Upon Senior Securities                            12
         Item 4.  Submission of Matters to a Vote of Security Holders        12
         Item 5.  Other Information                                          12
         Item 6.  Exhibits and Reports on Form 8-K                           12
         Signatures                                                          13
         Exhibit Index                                                       14


<PAGE>3


                                   PHAR-MOR, INC. AND SUBSIDIARIES
                                CONDENSED CONSOLIDATED BALANCE SHEETS
                                           (In thousands)
                                             (Unaudited)
<TABLE>
<CAPTION>

ASSETS
                                                           March 31,      July 1,
                                                             2001           2000
                                                             ----           ----
<S>                                                        <C>          <C>
Current assets:
  Cash and cash equivalents                                $  14,818    $  16,752
  Marketable securities                                           94        3,019
  Accounts receivable - net                                   26,563       25,017
  Merchandise inventories                                    195,660      207,228
  Prepaid expenses and other current assets                    6,881        6,538
                                                             -------      -------
          Total current assets                               244,016      258,554

Property and equipment - net                                  82,066       91,801
Goodwill                                                      15,245       15,809
Deferred tax asset                                             9,126        9,126
Investments                                                    5,012       13,682
Investment in Avatex                                           4,556        3,691
Other assets                                                   5,396        5,241
                                                             -------      -------

          Total assets                                     $ 365,417    $ 397,904
                                                           =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                         $  80,060    $  97,461
  Accrued expenses and other current liabilities              32,326       40,621
  Current portion of long-term debt and capital lease
     obligations                                               8,099        6,499
                                                             -------      -------
          Total current liabilities                          120,485      144,581

Long-term debt and capital lease obligations                 166,233      167,856
Long-term self insurance reserves                              6,175        7,335
Deferred rent and unfavorable lease liability - net            9,609       10,639
                                                             -------      -------
          Total liabilities                                  302,502      330,411
                                                             -------      -------

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

Stockholders' equity:
  Preferred stock                                               --           --
  Common stock                                                   122          122
  Additional paid-in capital                                  90,326       90,007
  Stock options outstanding                                    1,881        2,200
  Retained deficit                                           (23,301)     (19,012)
                                                             -------      -------
                                                              69,028       73,317
  Less: equity, through investment in Avatex, in cost of
     common stock of the Company held by Avatex, Inc.         (6,648)      (6,359)
                                                             -------      -------
       Total stockholders' equity                             62,380       66,958
                                                             -------      -------

        Total liabilities and stockholders' equity         $ 365,417    $ 397,904
                                                           =========    =========

</TABLE>

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


<PAGE>4



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

<TABLE>
<CAPTION>

                                                                  Thirteen         Thirteen
                                                                Weeks Ended       Weeks Ended
                                                              March 31, 2001     April 1, 2000
                                                              --------------     -------------

<S>                                                               <C>             <C>
Sales                                                             $ 300,175       $ 308,663

Less:
  Cost of goods sold, including occupancy and
      distribution costs                                            248,314         254,103
  Selling, general and administrative expenses                       50,704          50,635
  Depreciation and amortization                                       4,911           5,741
                                                                    -------         -------
Loss from operations before interest expense,
  investment loss, equity in income of affiliates,
  income taxes and extraordinary item                                (3,754)         (1,816)

Interest expense                                                     (3,966)         (4,581)
Investment loss                                                         (63)           --
                                                                    -------         -------
Loss before equity in income of affiliates,
  income taxes and extraordinary item                                (7,783)         (6,397)

Equity in income of affiliates                                        1,520           2,558
                                                                    -------         -------
Loss before income taxes and extraordinary item                      (6,263)         (3,839)

Income tax provision                                                   --            (1,536)
                                                                    -------         -------
Loss before extraordinary item                                       (6,263)         (2,303)

Extraordinary item - net of tax of $0 and $310, respectively          2,634             464
                                                                    -------         -------

Net loss                                                       $     (3,629)   $     (1,839)
                                                               ============    ============


Income (loss) per basic and diluted common share:
  Loss before extraordinary gain                               $       (.58)   $       (.21)
  Extraordinary gain                                                    .24             .04
                                                                    -------         -------
  Net loss                                                     $       (.34)   $       (.17)
                                                               ============    ============

Weighted average number of basic and diluted common shares
   outstanding                                                   10,810,801      11,032,886

</TABLE>

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


<PAGE>5



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

<TABLE>
<CAPTION>

                                                               Thirty-nine      Thirty-nine
                                                               Weeks Ended      Weeks Ended
                                                             March 31, 2001    April 1, 2000
                                                             --------------    -------------

<S>                                                            <C>             <C>
Sales                                                          $    950,688    $    976,909

Less:
  Cost of goods sold, including occupancy and
      distribution costs                                            786,645         791,236
  Selling, general and administrative expenses                      154,686         158,083
  Depreciation and amortization                                      15,209          19,008
                                                                    -------         -------
(Loss) income from operations before interest expense,
  investment loss, equity in income of affiliates,
  income taxes and extraordinary item                                (5,852)          8,582

Interest expense                                                    (14,370)        (13,999)
Investment loss                                                      (3,925)           (661)
                                                                    -------         -------
Loss before equity in income of affiliates,
  income taxes and extraordinary item                               (24,147)         (6,078)

Equity in income of affiliates                                          127           8,441
                                                                    -------         -------
(Loss) income before income taxes and extraordinary item            (24,020)          2,363

Income tax provision                                                   --               945
                                                                    -------         -------
(Loss) income before extraordinary item                             (24,020)          1,418

Extraordinary item - net of tax of $0 and $447, respectively         19,731             670
                                                                    -------         -------

Net (loss) income                                              $     (4,289)   $      2,088
                                                               ============    ============


Income (loss) per basic and diluted common share:
  (Loss) income before extraordinary gain                      $      (2.20)   $        .12
  Extraordinary gain                                                   1.81             .06
                                                                    -------         -------
  Net (loss) income                                            $       (.39)   $        .18
                                                               ============    ============

Weighted average number of basic and diluted common shares
   outstanding                                                   10,921,171      11,310,827

</TABLE>

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


<PAGE>6


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

                                                           Thirty-nine    Thirty-Nine
                                                           Weeks Ended    Weeks Ended
                                                         March 31, 2001  April 1, 2000
                                                         --------------  -------------

<S>                                                           <C>         <C>
OPERATING ACTIVITIES
  Net (loss) income                                           $ (4,289)   $  2,088
  Adjustments to reconcile net (loss) income to net
    cash (used for) provided by operating activities:
    Items not requiring the outlay of cash:
      Depreciation                                              13,092      13,894
      Amortization of video rental tapes                         1,137       4,101
      Stock option expense                                        --            95
      Amortization of deferred financing costs and goodwill      1,563       1,211
      Deferred income taxes                                       --         1,392
      Deferred rent and unfavorable lease liability             (1,030)       (486)
      Equity in income of affiliates                              (127)     (8,440)
      Loss on other investment                                   1,000        --
      Gain on extinguishment of debt                           (19,731)     (1,117)
    Changes in assets and liabilities:
      Accounts receivable                                       (1,546)        287
      Marketable securities                                      2,925       3,254
      Merchandise inventories                                   11,302        (792)
      Prepaid expenses                                            (343)        662
      Other assets                                              (1,154)       (135)
      Accounts payable                                         (13,844)    (17,070)
      Accrued expenses and other current liabilities            (9,455)      2,295
                                                                ------      ------
  Net cash (used for) provided by operating activities         (20,500)      1,239
                                                                ------      ------

INVESTING ACTIVITIES
  Proceeds from the sale of equity securities                    6,874       3,000
  Additions to rental videotapes                                  (871)     (1,136)
  Additions to property and equipment                           (3,382)    (12,949)
  Proceeds on sale of property and equipment                        23          33
  Investment in Avatex                                            --        (5,724)
  Investment in equity securities                                 (229)    (11,261)
                                                                ------      ------
  Net cash provided by (used for) investing activities           2,415     (28,037)
                                                                ------      ------

FINANCING ACTIVITIES
  Borrowings under revolving credit facility                    44,453      45,053
  Retirement of senior notes                                   (20,270)     (9,032)
  Bank overdrafts                                               (3,557)     (4,274)
  Principal payments on long-term debt                          (1,265)     (1,152)
  Principal payments on capital lease obligations               (3,210)     (5,550)
                                                                ------      ------
  Net cash provided by financing activities                     16,151      25,045
                                                                ------      ------

  Decrease in cash and cash equivalents                         (1,934)     (1,753)
  Cash and cash equivalents, beginning of period                16,752      17,346
                                                                ------      ------
  Cash and cash equivalents, end of period                    $ 14,818    $ 15,593
                                                              ========    ========

Supplemental Data
  Interest paid                                               $ 17,873    $ 11,604
                                                              ========    ========
</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 1,  2000 for
          additional   disclosures,   including  a  summary  of  the   Company's
          accounting  policies,  which  have  not  changed  except  for  the new
          accounting  pronouncement  discussed in Note 2. Operating  results for
          the  thirteen  and  thirty-nine  weeks  ended  March 31,  2001 are not
          necessarily  indicative  of the results  that may be expected  for the
          fifty-two weeks ending June 30, 2001.

2.        NEW ACCOUNTING PRONOUNCEMENTS
          In June 1998, the Financial Accounting Standards Board ("FASB") issued
          Statement  of  Financial   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 Nos.  137 and
          138) is effective  for all fiscal  quarters of fiscal years  beginning
          after June 15, 2000.  The Company  adopted SFAS 133 effective  July 2,
          2000,  and the adoption of this standard did not have an impact on its
          consolidated financial position, results of operations or cash flows.

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,  results of operations
          or cash flows.


4.        EXTRAORDINARY ITEM
          The Company recorded an extraordinary gain on the early extinguishment
          of debt of $19,731 in the thirty-nine  weeks ended March 31, 2001 from
          the repurchase of $40,001 in senior notes.



<PAGE>8


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 March 31, 2001 versus
    Thirteen Weeks Ended April 1, 2000

Sales for the third quarter of fiscal year 2001 ("Fiscal  2001")  decreased 2.7%
compared to the third  quarter of fiscal year 2000 ("Fiscal  2000").  Comparable
store sales  decreased 2.7% from $307,116 for Fiscal 2000 to $298,825 for Fiscal
2001.  Comparable  store pharmacy sales  increased 7.4% while  comparable  store
"front-end"  sales decreased 7.5%. Higher energy prices, a declining economy and
a weak retail environment combined to reduce sales in the current quarter.

Cost of sales as a  percentage  of sales was 82.7% in Fiscal  2001  compared  to
82.3% in Fiscal 2000,  an increase of .4% 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 and higher  occupancy
costs as a percentage of sales to the decrease in sales.

Selling, general and administrative expenses as a percentage of sales were 16.9%
in Fiscal 2001  compared to 16.4% in Fiscal  2000,  an increase of .5% of sales.
This increase was primarily due to higher employee health benefit costs,  higher
energy  costs and lower  sales  partially  offset by a  reduction  in  corporate
personnel costs.

Depreciation  and  amortization  expense was $4,911 in Fiscal  2001  compared to
$5,741 in Fiscal 2000, a decrease of $830.  The decrease was  primarily due to a
$522  decrease in video tape  amortization  due to the closure of the  Company's
poorer performing video rental departments combined with lower video rental tape
purchases in continuing video rental departments.

Interest  expense  was $3,966 in Fiscal 2001  compared  to  interest  expense of
$4,581 in Fiscal 2000, a $615 decrease. The decrease in interest expense was due
to the repurchase of $40,001 of senior notes since November 16, 2000.

Equity in income of affiliates  declined from $2,558 in Fiscal 2000 to $1,520 in
Fiscal 2001, primarily due to lower income realized by an investment partnership
for which the Company has an investment.

The income tax benefit  was $0 in Fiscal 2001  compared to income tax benefit of
$1,536 in Fiscal 2000.  No income tax benefit has been  recorded  related to the
Fiscal  2001  pre-tax  losses as a result of a full  valuation  allowance  being
recognized  on the net  operating  losses.  The Fiscal  2000  income tax benefit
recognized  resulted  from the  reversal of income tax expense  recorded  during
earlier quarters of Fiscal 2000.

The Company recorded an extraordinary  gain on the early  extinguishment of debt
of $2,634 in Fiscal  2001 from the  repurchase  of $5,348 of its  11.72%  senior
notes.

Thirty-nine Weeks Ended March 31, 2001 versus
    Thirty-nine Weeks Ended April 1, 2000

Sales for the thirty-nine  weeks ended March 31, 2001 decreased 2.7% compared to
the thirty-nine weeks ended April 1, 2000. Comparable store sales decreased 2.6%
from $968,265 for the thirty-nine  weeks ended April 1, 2000 to $943,058 for the
thirty-nine  weeks  ended  March  31,  2001.  Comparable  store  pharmacy  sales
increased 5.9% while comparable store  "front-end"  sales decreased 6.3%. Higher
energy prices,  a declining  economy and bad weather combined to reduce sales in
the current year while last year benefited from a strong stock market,  an early
flu season, Y2K related sales and mild weather.

<PAGE>9

Cost of sales as a percentage of sales was 82.8% for the thirty-nine weeks ended
March 31, 2001 compared to 81.0% for the thirty-nine  weeks ended April 1, 2000,
an  increase of 1.8% of sales.  The  increase  was  primarily  due to  increased
promotional  pricing, a change in the sales mix reflecting  reductions in higher
margin  front  end sales and  increases  in lower  margin  pharmacy  sales,  the
inclusion of vendor allowances for the  remerchandising of the Pharmhouse stores
in the  thirty-nine  weeks ended April 1, 2000 and a reduction  in video  rental
tape sales and gross  margin due to the  elimination  of  underperforming  video
rental departments.

Selling, general and administrative expenses as a percentage of sales were 16.3%
for the  thirty-nine  weeks  ended  March  31,  2001  compared  to 16.2% for the
thirty-nine  weeks  ended  April 1,  2000,  an  increase  of .1% of sales.  This
increase was  primarily  due to a provision  for employee  termination  costs of
$1,140 recorded in the thirty-nine weeks ended March 31, 2001 for a reduction in
certain corporate personnel.

Depreciation  and  amortization  expense was $15,209 for the  thirty-nine  weeks
ended March 31, 2001 compared to $19,008 for the  thirty-nine  weeks ended April
1, 2000,  a decrease  of $3,799.  The  decrease  was  primarily  due to a $2,964
decrease in video tape  amortization  due to the closure of the Company's poorer
performing  video  rental  departments  combined  with lower  video  rental tape
purchases in continuing video rental departments.

Interest  expense  was $14,370  for the  thirty-nine  weeks ended March 31, 2001
compared to interest expense of $13,999 for the thirty-nine weeks ended April 1,
2000, a $371 increase. The increase in interest expense was due to the write-off
of $354 in deferred  financing fees  associated  with the prior credit  facility
with  BankAmerica and increased  borrowings  under the revolving credit facility
partially  offset by lower  interest  expense  due to the  repurchase  of senior
notes.

Equity in income of affiliates  declined from $8,441 for the  thirty-nine  weeks
ended April 1, 2000 to $127 for the  thirty-nine  weeks  ended  March 31,  2001,
primarily due to lower income  realized by an investment  partnership  for which
the Company has an investment.

The income tax benefit  was $0 in Fiscal 2001  compared to income tax expense of
$945 in Fiscal  2000.  No income tax  benefit has been  recorded  related to the
Fiscal  2001  pre-tax  losses as a result of a full  valuation  allowance  being
recognized  on the net  operating  losses.  The Fiscal  2000  income tax expense
recognized was based upon the Company's  estimated effective tax rate of 40% for
the year applied to the earnings  generated  through the thirty-nine weeks ended
April 1, 2000.

The Company recorded an extraordinary  gain on the early  extinguishment of debt
of $19,731 in the thirty-nine  weeks ended March 31, 2001 from the repurchase of
$40,001  in senior  notes.  In the  thirty-nine  weeks  ended  April 1, 2000 the
Company recorded an extraordinary  gain on the early  extinguishment  of debt of
$1,117 from the repurchase of $10,149 in senior notes.

FINANCIAL CONDITION AND LIQUIDITY (all dollar amounts in thousands)

The Company's cash position as of March 31, 2001 was $14,818. 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  BankAmerica  Business
Credit,  as agent,  and other financial  institutions  that established a credit
facility in the maximum amount of $100,000.

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

<PAGE>10

Advances  made under the  Amended  Facility  bore  interest  at the  BankAmerica
reference rate plus 1/2% or LIBOR plus 2.00% from January 1 to June 30 each year
and the BankAmerica  reference rate plus 3/4% or LIBOR plus 2.25% from July 1 to
December 31 each year. Under the terms of the Amended Facility,  the Company was
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.

The Amended Facility was terminated on November 16, 2000.

The Company entered into a Loan and Security  Agreement (the "Credit  Facility")
effective  November 16, 2000 with Fleet Retail Finance Inc., as agent, and other
financial  institutions that establishes a credit facility in the maximum amount
of $150,000.

Borrowings  under the Credit  Facility may be used for working capital needs and
general corporate purposes. Up to $20,000 of the Credit Facility at any time may
be used for  standby  and  documentary  letters of credit.  The Credit  Facility
includes  restrictions  on, among other things,  additional  debt,  investments,
dividends  and other  distributions,  mergers and  acquisitions  and contains no
financial covenants as long as unused credit availability is at least $20,000.

Credit  availability  under the Credit Facility at any time is the lesser of the
aggregate  availability  (as defined in the Credit  Facility) or  $150,000.  The
Credit Facility  establishes a first priority lien and security  interest in the
all of the assets of the Company excluding real property and equipment.

Advances made under the Credit Facility bear interest at the Fleet National Bank
prime rate or LIBOR plus 2.00% to LIBOR  plus  2.50%  depending  on the  average
unused  credit  availability  in the preceding  quarter.  Under the terms of the
Credit  Facility,  the Company is required to pay a commitment  fee of 0.25% per
annum on the unused  portion of the facility,  letter of credit fees and certain
other fees.

Unused availability under the Credit Facility, after subtracting amounts used
for outstanding letters of credit, was $36,663 at March 31, 2001.

The Credit Facility expires on November 30, 2003.


Thirty-nine weeks ended March 31, 2001

During the  thirty-nine  weeks ended March 31, 2001, the Company's cash position
decreased by $1,934.  Net cash used for operating  activities  was $20,500.  The
major uses of cash from  operating  activities  were net loss of $4,289 less the
non-cash  gain on  extinguishment  of debt of  $19,731,  a decrease  in accounts
payable of $13,844, a decrease in accrued expenses and other current liabilities
of $9,455.  These were partially  offset by a decrease in inventories of $11,302
and depreciation expense of $13,092.

Capital  expenditures of $3,382,  additions to video rental tapes of $871 and an
investment in equity securities of $229 were offset by proceeds from the sale of
equity securities of $6,874.

Net cash  provided by financing  activities  of $16,151  consisted of borrowings
under the revolving  credit facility and increases in bank overdrafts  partially
offset by payments  made to retire  senior  notes,  principal  payments on lease
obligations and principal payments on long-term debt.

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

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

<PAGE>11


met.  SFAS No. 133 (as amended by SFAS Nos.  137 and 138) is  effective  for all
fiscal  quarters of fiscal  years  beginning  after June 15,  2000.  The Company
adopted SFAS 133 effective  July 2, 2000,  and the adoption of this standard did
not have an impact on its consolidated financial position, results of operations
or cash flows.


<PAGE>12


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 14.

         (b)      Reports on Form 8-K

                  None.




<PAGE>


                                   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 10, 2001                    by:   /s/ Martin S. Seekely
                                          ------------------------
                                                 Martin S. Seekely
                                                 Vice President and Chief
                                                   Financial Officer



Date:  May 10, 2001                    by:   /s/ John R. Ficarro
                                          ----------------------
                                                 John R. Ficarro
                                                 Senior Vice President and Chief
                                                   Administrative Officer


<PAGE>




                                 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 November 16, 2000, by
                  and among the financial institutions listed on  the  signature
                  pages  therein,  Fleet  Retail  Finance,  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.,  Phar-Mor  of Wisconsin, Inc. and
                  Pharmhouse Corp.


--------------------------------------------------------------------------------
*        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 February 9, 2001