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Online group buys 2 pharmacies with plans to expand further

Armada Pharmacy in Essex is one of the two sites bought by Pharmadose. Credit: © 2017 Google, image capture: July 2016
Armada Pharmacy in Essex is one of the two sites bought by Pharmadose. Credit: © 2017 Google, image capture: July 2016

The online pharmacy group Pharmadose has bought two high-street pharmacies, with plans to expand its portfolio further "in the coming years".

The pharmacies in Chafford Hundred, Essex, and Lavenham, Suffolk were acquired from Armada Pharmacy for an undisclosed sum a week ago (June 7).

The co-director of Pharmadose Divyesh Patel told C+D today (June 15) that the acquisition is part of its aim to own 10 pharmacies in total over the next few years, “to grow as a company” and “serve the community”.

The sale will boost Pharmadose's turnover forecast “from £1.3 million to £3.3 million”, according to a statement from the company, as well as increase staff numbers from 11 to 25.

Mr Patel said he could not comment on how much each pharmacy had been bought for, but that “all” of a £2.3m bank loan from Santander went towards the purchases.

He aims to counteract the pharmacy funding cuts in England through providing services such as blood tests, which another of the company's branches already offers, Mr Patel told C+D.

Expanding the online offering

The Peterborough-based company – which began as an online-only operation – already owns one community pharmacy in Twickenham, London.

Co-director of Pharmadose Svikrut Patel said that after starting out online-only in 2010, the community pharmacies “give us a chance to liaise directly with customers and diversify the products we sell”.

Pharmadose will continue working with bank, Santander, Mr Patel said. “We have been with Santander since we started as a company and they can see how efficiently we run a business.”

The relationship director at Santander Mark Lawson said he is “sure” Pharmadose will achieve its goal of owning 10 pharmacies.

“Pharmadose is an excellent example of a business which has evolved its business model in order to continue growing," he said.

What were the most significant pharmacy acquisitions of 2016? Find out here

7 Comments
Question: 
What are the key differences between community and online pharmacies?

samantha Simo, Buying

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R A, Community pharmacist

I guess Fred the Shred's clone is running Santander bank! No sane manager would lend £100k for a pharmacy business let alone £2.3 million since pharmacy is a sector in which you are at the whim of a very powerful buyer (NHS) and have no hope of increasing profit margins through means of differentiation, unlike most other retail business.

The only option open to contractors like Mr Patel would be to run pharmacies on a shoestring budget to maintain some form of profit. All I can say to Mr Patel is goodluck!

Brian Austen, Senior Management

Consolidation within an underfunded industry is not new, you just have to look at care homes. Eventually some of the consolidators will be consolidated as well until there are very few single-handers and small groups and 5 or 6 supersized organisations. The reduced competition, which is still strong at the moment will drive down quality until pharmacy becomes the lesser part of large retail groups. Look out for the rise of dispensing factories and the arrival of Amazon Pharmacy. Its nearer than you think!

s8chy P, Pharmacy owner/ Proprietor

*This comment has been deleted for breaching C+D's community principles*

Rehan Nawaz, Pharmacy owner/ Proprietor

Can I borrow your crystal bowl Mr Patel, because I too would like to be able to predict future turnovers

S Morein, Pharmacy Area manager/ Operations Manager

Savage cuts... pharmacy going Bankrupt. Oh look a chain chomping at the bit to buy  more pharmacies and a bank desperate to support them. Real evidence of "collapse of the network". 

P M, Community pharmacist

take the rx close the shops ... boom

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