Pacific Enterprises in Active Talks for Sale of Troubled Thrifty Corp.

Pacific Enterprises confirmed Monday that it is actively discussing the sale of its money-losing Thrifty Corp. retailing subsidiary--including the Thrifty Drug chain--with several potential buyers.

The company declined to reveal the names of the parties engaged in acquisition talks, but industry publications have reported that they have at some point included Kmart Corp., whose retail operations include Payless Drug and Sports Authority outlets, and Walgreen Co., which operates its own chain of drugstores.

Willis B. Wood Jr., Pacific Enterprises’ president and chief executive, said the Los Angeles-based company has hired Morgan Stanley & Co. to assist in the negotiations. He characterized the talks as preliminary and cautioned that there is no assurance that a deal will be struck.

“Since we announced our restructuring program in early February, we have received a number of inquiries expressing interest in buying our entire retailing operation,” Wood said.

Thrifty Corp. includes three drug chains--Thrifty Drug Stores, Pay’n Save Drug Stores and Bi-Mart--and three sporting goods outfits--Big 5, Gart Bros. and MC Sporting Goods.

A Pacific Enterprises spokesman said talks with the group of potential buyers involve all six stores and would not require the group to be split up among several buyers. Pacific Enterprises, parent of the Southern California Gas Co., said in February that it wanted to refocus on its core utility business. It has had problems with an energy exploration unit as well as with Thrifty Corp.

When the company put its retailing operations on the sales block, it said it hoped to retain the Thrifty Drug chain in hopes of improving its operations and, hence, increasing the sales price it would fetch when it was finally put up for sale.

However, sources have said that Pacific Enterprises executives chose not to wait for the turnaround, deciding instead to be rid of the money-losing retail operation as soon as possible.

Thrifty Corp. operates 1,052 stores and had a loss of $163 million on sales of $3.3 billion last year. In the previous year, the retailing subsidiary lost $66 million. The poorly performing retail operations caused Pacific Enterprises to lose $88 million last year and to eliminate its common stock dividend.

Sources have said that Wood would like nothing more than to tell shareholders at the company’s annual meeting next week that he has a potential buyer for the retailing businesses.