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How two 23-year-old pharmacists snagged an ex-Lloydspharmacy branch

Just three months after qualifying as a pharmacist, Ather Diab and his friend Farhad Mehmood opened their first pharmacy, an ex-Lloydspharmacy branch in Edinburgh.

On November 13, the young pharmacists opened the Bruntsfield Pharmacy Travel and Health Clinic to the public.

With both new owners aged just 23, and with Mr Diab only qualifying as a pharmacist in July 2023, the idea of owning an independent pharmacy was a pipedream until the news of Lloydspharmacy’s exit from the high street.

Read more: Lloydspharmacy confirms 'successful sale' of all community pharmacies

In November, C+D exclusively revealed that Lloydspharmacy had exited the community pharmacy sector by “successfully” selling all of its 1,054 “high street and community pharmacies”.

The multiple said at the time that the pharmacies were “bought individually or in regional packages” by “independent pharmacy owners and local entrepreneurs”.

                   

A lucky break

 

The friends had for years shared their aspirations of owning a pharmacy, but acknowledged how difficult it was to become a contractor.

“As much as we loved the idea, we didn't have much hope that we would actually find ourselves in this position,” Mr Diab told C+D this week (January 3).

When the news broke that Lloydspharmacy was selling its branches, Mr Mehmood started researching the Edinburgh branch. The pair initially decided it was too much of a risk, but once Mr Diab had passed his exams they decided to “go for it”, they said.

Read more: ‘Historically significant’: All the reaction to Lloydspharmacy’s high street exit

They were lucky to acquire this particular branch as it had been sold while Mr Diab was sitting his exams, they told C+D. But serendipitously for the pair, that sale had fallen through, and talks were reignited.

With paperwork signed in September and doors opening in November, it has been “all hands on deck”, Mr Diab said.

 

A difficult process

 

This particular store was one of the final branches to sell of the Lloydspharmacy portfolio, according to the pair. Many of the Lloydspharmacy staff that dealt with the buying process had already been made redundant, making communication between buyer and seller a struggle, they told C+D.

“A lot of the time, we found ourselves in a position where there was no one to answer our questions,” Mr Diab said.

Read more: Lloydspharmacy quits the high street: It’s the end of the world as we know it

Traditionally, there would be one buyer manager assigned to guide the process from start to finish, according to the pair. In this case, Mr Diab and Mr Mehmood said they had four, with the last only giving them an hour’s notice of her departure from the firm.

The pair described the sale process to C+D as “one step forward and two steps back”, with them considering walking away from the process and losing their non-refundable deposit - 20% of the purchase price.

Read more: Jhoots adds 36 ex-Lloydspharmacy branches to its estate

“The process was very difficult. However, we persevered because we believed that there was light at the end of the tunnel and that has turned out to be the case, thankfully,” Mr Diab told C+D. “I didn't tell any of my friends about this, or that this was even a possibility, because I wasn't confident at any point in time that it would actually go through.”

“It was only until we were super certain it was going happen that we started mentioning it to people,” said Mr Mehmood.

 

“An eyewatering amount of money”

 

At the beginning of the sale process, Lloydspharmacy had required around a 3% deposit on branches, the pair told C+D.

But as the process continued, this rose to 10% because buyers were not fully committed to deals and dropping out of the process, they claimed. By the time Mr Diab and Mr Mehmood came to purchase their branch, they laid down a 20% deposit.

Read more: Pharmacist couple buy second ex-Lloydspharmacy branch for almost £500k

Solicitors advising the young pharmacists told them that they had to accept that if the deal fell through for any reason, the deposit would be gone. “This was pivotal,” explained Mr Diab. “We asked ourselves how willing are we to take this risk? Because this is an eyewatering amount of money for two young pharmacists.”

“Lloydspharmacy was coming to the end of the sales process and it was quite adamant about getting the last sales over the line,” he told C+D. “This was Lloydpharmacy’s way of ensuring that you couldn’t walk away, and if you did then you would be walking away with a big, big loss.”

Read more: Ex-Lloydspharmacy superintendent Victoria Steele lands new role in group

The pair used their life savings, buoyed by locum shifts and working every day through the pandemic at a supermarket, to make the deal happen. But it still was not enough to take on a deal of this magnitude, so the pair went in search of external investment.

“As two 23-year-olds, it's hard to get people to part with their cash [and] to find someone that will believe in you and the vision you've got for the place. It was a real struggle to find that extra money we needed, but we managed to do it,” said Mr Mehmood.

 

“A whole new world”

 

The friends concurred that Lloydspharmacy selling off its branches has provided opportunities for pharmacists, young and old, to own their own pharmacies. They said that because the multiple was eager to sell, although the prices were still high, they were at least negotiable.

“We know of people that have had 10- [or] 20-year careers in pharmacy that have always wanted to own and operate their own pharmacy. This was their first opportunity to make that happen and a lot of them did,” Mr Diab told C+D.

Read more: ‘Really proud’: Welsh Well pharmacy bought by 29-year-old pharmacist

Understandably, the pair - who both originate from Glasgow - are concentrating for the time being on their new acquisition, but they have grand plans for the future. They told C+D that they want to take the pharmacy “to new heights”, including by offering services that will benefit the community.

The pharmacy had lost a lot of custom over the year, the pair claimed, and there is now a big push to try and win customers back.

Read more: Do corporate disposals offer an opportunity for independents?

The enthusiastic new owners of Bruntsfield Pharmacy have started by meeting with the local surgery for feedback on the services that the pharmacy was lacking and what patients used to complain about. The pair are now trying to build a symbiotic relationship with the surgery to increase services and “accomplish a shared goal of putting patients first,” said Mr Mehmood.

“Historically, pharmacy is about prescriptions, prescriptions, prescriptions. But on the services side of it, it's not something you learn at university, it's a whole new world. That really excites us,” he said.

C+D approached Lloydspharmacy’s representatives for comment.

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