Retailing under current regulations is like “fighting with one arm tied behind your back,” says Chemist Warehouse co-founder Jack Gance
Speaking to the Weekend Australian’s Victorian Business Editor, Damon Kitney, Mr Gance has again denied recent rumours of an Initial Public Offer or float – but outlined changes to its ownership model.
In late 2017, rumours began to circulate that the discount giant was considering an ASX listing—but in March 2018, Mr Gance spoke to The Australian’s Eli Greenblat and said that while Chemist Warehouse had considered a number of options, it had no interest in an IPO.
Now, he has told Mr Kitney that such a move is “not on our horizon”.
“We have no immediate plans to IPO and are not moving towards a float,” Mr Gance said. We have other priorities that are more important.
“To float, we would have to make a lot of changes that we haven’t had the time or bandwidth to do. At the moment we are more focused on growth. And we don’t want to take money off the table. We want to grow the business among our own partners.”
Instead, Chemist Warehouse has been in the process of restructuring its ownership, moving from an individual partnership model to a full franchise model.
This will allow “more effective and efficient operations,” he said.
It may be talk of this restructure that sparked the resurgence of rumours about a float, he said.
The article also outlines Chemist Warehouse’s current and ongoing plans for expansion, which include the intention to open around 30 new pharmacies each year, “despite opposition from the powerful Pharmacy Guild,” Mr Kitney writes.
“For years Gance and Verocchi have exploited a loophole in the rules to expand their empire but the two sides continue to butt heads,” he writes.
Mr Gance said that Health Minister Greg Hunt’s support for the status quo “hurts pharmacies generally” as well as hurting Chemist Warehouse.
“Our growth hasn’t been at the expense of pharmacies generally. Our growth has come from supermarkets and specialty stores. I think the health food store business has been decimated by our vitamins business.
“We are working within whatever rules the guild throws at us. We have very strong loyalty with consumers. So we are just getting on with it. It is like fighting with one arm tied behind your back but I think we have a pretty powerful punch.”
Chemist Warehouse co-founder Damien Gance recently told the Queensland Parliamentary Inquiry into pharmacy that Australians did not care who owned pharmacies, and that ownership should be restricted to a “fit and proper person” test.
More plans for the group include further expansion into vitamins, after it supported the launch of The Natural Vitamin Co; the first bricks-and-mortar store in one of China’s free trade zones; and potentially stores in Singapore and the United States.