#PSC10YearsTrading
Our seventh year of trading was dominated by the ongoing fallout from the previous year’s funding cuts.
In October 2017, Lloyds Pharmacy announced that they were planning to close or sell almost 200 branches in response to the funding pressures. Whilst it was becoming increasingly common for the multiple pharmacy groups to sell branches that were no longer viable for them, it was almost unheard of for any pharmacy business to close pharmacies, especially on this scale.
The sector struggled to understand how Lloyds decided which pharmacies to sell and which to close but both strategies led to a number of opportunities for entrepreneurial pharmacy companies as well as new entrants to the sector. A number of the smaller businesses would be sold to first time buyers giving them an opportunity to ‘get their foot on the ladder’ and to turn around underperforming pharmacies. In other cases, the Lloyds branches were bought by existing small groups who saw the opportunity for rapid expansion.
The closure of some branches also presented opportunities. In one example, Lloyds closed a branch in a medical centre in Basingstoke leaving a potential gap in service provision. We helped to set up a joint venture between the GPs and a small local pharmacy group and applied on their behalf for a new contract at the recently closed site. We weren’t the only ones to spot this opportunity as there ended up being 5 applications, including the one made by our client. However, at the end of a lengthy process involving multiple applications, appeals and an oral hearing, we were able to persuade the appeal authority that not only was there a need for a pharmacy to re-open at this site, but that our clients were best placed to run the pharmacy and their application was granted in preference to the others.
Lloyds were not the only multiple looking to streamline their operation. We were also engaged to assist Boots with the sale of their shares in ‘consortium pharmacies’ where they were one of several shareholders. In some cases, the decision by Boots to sell shares prompted the other shareholders to dispose of their interest, resulting in the pharmacy being placed on the open market. An example of this was a modern purpose-built health centre pharmacy in East Anglia which we sold to a local group. In other cases, Boots shares were sold to the existing shareholders giving them more control of the business.
Here’s a recap of years 1 – 6
