Thrifty May Not Rebuild 3 Burned Stores : Business: It replaced four drugstores lost in the Watts riots. But the firm is vastly underinsured and is in throes of devastating economic problems.

Thrifty Drug, the oldest and largest drugstore chain in Los Angeles, did not hesitate to rebuild the four outlets it lost to the fire and vandalism of the Watts riots in 1965--a decision, chain officials recall, that signaled their commitment to South Los Angeles and its residents.

But Thrifty is not likely to undertake a second round of rebuilding in South Los Angeles now.

Vastly underinsured for its losses and in the throes of devastating economic problems, Thrifty officials say they doubt they can afford the $5 million to $6 million it would likely cost to replace the three stores burned out during Wednesday night’s and Thursday’s rioting.

“Our faith in the community remains unshaken. We can’t blame the community,” said marketing director Chris Bement, moments before the Mid-Wilshire company headquarters was evacuated because of nearby fires. “But we are living under economic constraints. The timing just isn’t very good.”

With 46 outlets in greater South Los Angeles, Thrifty officials were hardly surprised that their stores were among the hardest hit by vandals during the early stages of rioting. “Everyone in the area is being hit hard,” Bement said. “We have more stores there than others, so we’re just hit harder.”

By Thursday afternoon, 17 Thrifty stores had been closed in the central riot area, in addition to the outlets burned at La Brea Avenue and Rodeo Road, Rodeo Place and Crenshaw Boulevard, and Crenshaw Boulevard near Imperial Highway in Inglewood. Of those 17 closed, nine had been looted. None of the 17 stores will reopen today. Further, four other Thrifty outlets had been invaded by looters and before they were closed, including the store in Inglewood.

All Thrifty managers throughout Los Angeles County were authorized Thursday morning to close their stores if it was necessary to protect their employees. David Karshner, manager of the outlet at La Brea Avenue and Santa Monica Boulevard in West Hollywood, shut his doors at noon and sent his 35 employees home.

“I don’t think anything is going to happen here, but it’s getting closer and I don’t want to risk it,” he said. “I don’t want to sit around and wait.”

Although Thrifty officials believe their stores were not being singled out by vandals, they acknowledged that the stockpile of drugs in their pharmacies may have attracted looters, just as liquor stores have proven frequent targets.

“Hooligans are taking advantage of the entire situation,” Bement said. “It’s not being directed at us.”

Thrifty began serving Los Angeles in far quieter times.

It was founded in 1929 as Thrifty Cut Rate Drug Store by two brothers, Harry and Robert Borun, and their brother-in-law, Norman Levin. The first store was in downtown Los Angeles, at 4th Street and South Broadway. Over the years it grew to become the largest drugstore chain on the West Coast, with 620 outlets and 15,000 employees in California, Arizona and Nevada, including 329 stores and about 7,000 employees in Southern California.

In 1986, the chain was purchased by Pacific Enterprises, operator of the Southern California Gas Co., as part of its ill-fated effort to expand beyond its primary business. In the years since, Thrifty has fallen on hard times and is losing millions of dollars every year. Pacific Enterprises is trying to sell the chain and reported earlier this week that it is negotiating with several potential bidders.

Bement said the company did not insure its stores for their full replacement value and carries an insurance policy with a deductible of more than $1 million.

“We’re going to take a hit on this,” he said. “No matter what we feel about the community, it isn’t likely that we can reinvest.”