Executive Summary

REVCO AUTHORIZING CMTE. TO IMPROVE CHAIN's PURCHASING PROCEDURES, the company stated in a Sept. 7 press release.Revco said a special cmte. of outside directors, which was appointed in July to investigate allegations about the chain's purchasing practices, has been authorized by the board to "continue to work with management consultants from Peat, Marwick, Mitchell & Co. in developing a program for continuing improvement in purchasing department procedures and policies and closer coordination with other departments." Revco's board also approved plans proposed by VP-merchandising and purchasing Daniel Horowitz for purchasing improvements. The cmte. found that there had been "inadequate procedures and practices within the purchasing department" which "contributed to some purchasing mistakes," the release said. The group also identified a "lack of coordination between the purchasing of promotional goods and regular inventory, scheduling difficulties for promotional items with related advertising circulars, weakness in verification of certain purchase order quantities with quantities actually delivered, timing of deliveries for some seasonal goods, and coordination among purchasing, store operations and warehouses." The cmte. concluded, however, that the "specific allegations" made by Odd Lot subsidiary officials Isaac Perlmutter and Bernard Marden were "in many cases insignificant, contained extensive errors factually, and in large part dealt with matters where business judgment could have gone either way at the time the decision was made." None of the allegations have had "a material financial (BRACKET)effect(BRACKET) on the company," the cmte. said. The board approved the transfer of purchasing responsibility from Elliot Dworkin, now VP-marketing, to Horowitz. Revco merged merchandising and purchasing responsibilities under Horowitz in August. The board also approved Revco's decision to terminate further purchasing through Joseph DeKama.