Chemist Warehouse

Last updated

Chemist Warehouse Group
Company typePrivate
Industry Pharmacy
Founded2000;24 years ago (2000)
Founders
  • Jack Gance
  • Mario Verrocchi
Headquarters Preston, Victoria
Australia
Number of locations
540+ stores in Australia and New Zealand (2023) [1]
Area served
 Australia, New Zealand, Ireland, China, United Arab Emirates
Key people
Damien Gance
Mario Tascone [2]
Products
  • Pharmacy
  • health products
  • supplements
  • perfume
  • personal care
  • baby products
  • weight loss
  • cosmetics
Number of employees
20,000
Website

Chemist Warehouse Group (trading as Chemist Warehouse, My Chemist, My Beauty Spot) [3] is an Australian company operating a chain of retail pharmacies both locally and internationally. The company is one of Australia's largest pharmacy retailers with over 500 stores in Australia, [4] and employs over 20,000 staff. [5] The company brands itself as offering discounted prices for pharmaceutical goods. [6] [7]

Contents

The company also manages a website and a "click and collect" 24 hour dispense either pick-up and delivery service for medications. [6]

History

The Gance brothers, Jack and Sam, purchased their first chemist in 1972 in the Melbourne suburb of Reservoir. Fresh out of university with a pharmacy degree, Mario Verrocchi, became a trainee under Sam Gance in 1980. [8] The brothers expanded to three locations before leaving the Amcal chain in 1997 and establishing their own brand, My Chemist. [9] In 2000, Jack Gance and Verrocchi founded Chemist Warehouse, opening the first store in Melbourne. [10]

Chemist Warehouse made its first international expansion in 2017, launching in New Zealand. [11] In 2020, it expanded to Ireland. [12] The company opened it first store in China in October 2021. [13]

In late 2018, the company launched its Ultra Beauty concept, luxury fragrance and beauty product stores which operate within Chemist Warehouse stores. [14]

Chemist Warehouse entered the optometry market in 2023, opening its first Optometrist Warehouse store in Malvern in February. [15] In the second half of 2023, Chemist Warehouse established Chemist Warehouse Hospital Pharmacy, a joint venture with Cathie Reid and Stuart Giles aiming to establish a network of hospital-based pharmacies. [16]

In June 2023, Chemist Warehouse signed a five-year supply contract with Sigma Healthcare. As part of the deal Chemist Warehouse would receive a 10.7 per cent stake in Sigma when the contract starts on 1 July 2024. [10]

In December 2023, Chemist Warehouse Group announced its intention to merge with Sigma through a reverse takeover. The deal would make Chemist Warehouse a publicly-listed company on the ASX. [17]

In October 2024, Chemist Warehouse opened its first United Arab Emirates store in Dubai. [18]

Business model

Chemist Warehouse interior Rocklea, Queensland Interior of Chemist Warehouse at Rocklea, Queensland.jpg
Chemist Warehouse interior Rocklea, Queensland

Chemist Warehouse uses a complex franchise structure to circumvent Australian regulations that limit how many pharmacies a company can operate in any one area. [19] The company's structure allows it to "control" about 400 pharmacies across Australia, and it makes up about 50 percent of the market share. The business model used by Chemist Warehouse is thought to involve minimal equity investment by individual pharmacists who agree to the trading terms enforced across the group. Individual pharmacists working under the Chemist Warehouse umbrella benefit from the bulk purchasing power that comes with being part of the company. [20]

Unlike traditional pharmacies, Chemist Warehouse generates most of its sales from non-prescription products such as vitamins, fragrances, cosmetics and baby formula. [21] [22] Chemist Warehouse also partly owns several brands including Bondi Protein Co, Goat Soap, Barely Intimate Skincare, Bambi Mini and the Wagner supplement brand. [23] It is a shareholder in medical vape manufacturer Liber Pharmaceuticals. [24]

In addition to online shopping through Chemist Warehouse websites, [25] the company trades on several e-commerce marketplaces. It sells to China on Alibaba's Tmall Global and Kaola platforms, and to Southeast Asia on Lazada. [13] [26] The company sold more than A$20 million worth of stock during the first seven hours of Alibaba’s Singles’ Day sale in November 2018. [13]

The company had an estimated revenue of $2.3 billion in 2013–14. [27]

Radio

The company has a radio station called Chemist Warehouse Remix which broadcasts in stores as well as on DAB+ and the iHeartRadio app. This is run in partnership with the ARN group and New Zealand Media and Entertainment. [28] [29]

Criticism

The Pharmacy Guild of Australia and pharmacists' union have criticised the company, stating its approach threatens both healthcare standards and employment conditions in the industry. [19] In 2016, Chemist Warehouse was ordered to back-pay almost 6,000 employees a total of over $3.5 million after an audit by the Fair Work Ombudsman. [22] [30] A two-week strike by workers at the company's major distribution centres in March 2019 led to pay rises and a change to the way the company uses labour hire. [31]

Founders

Jack Gance had opened his first pharmacy in 1972 and with his brother developed the largest pharmacy distributor in Australia, creating brands such as Le Specs sunglasses, Le Tan sunscreen and Australis cosmetics. He sold the distribution business in 1991 and studied for a Master of Business Administration at Monash University and the New York University Stern School of Business. [32] [33] The next generation of the family includes Damien Gance, [34] who is also involved in running the business, and television doctor Elena Gance. [35]

Jack Gance and his wife own a mansion in the Melbourne suburb of Toorak, [36] as does his brother Sam, who is married to reality television star Janet Roach. [37] Verrocchi and his wife Fiona own the historic Morning Star Estate on the Mornington Peninsula south of Melbourne. [38] In 2013, Inside Retail magazine ranked Sam Gance as the 16th "most powerful" retailer in Australia. [39]

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References

  1. ↑ Rowley, David (15 May 2023). "Chemist Warehouse boasts 540+ ANZ outlets" . AJP. Retrieved 12 October 2023.
  2. ↑ "Chemist Warehouse boss issues warning over plan to double prescriptions". The Sydney Morning Herald. Nine Entertainment Co. 11 April 2023. Retrieved 25 April 2023.
  3. ↑ Jolly, Nathan (13 June 2024). "'Competition concerns' flagged with Sigma's proposed Chemist Warehouse takeover". Mumbrella . Retrieved 24 October 2024.
  4. ↑ Rowley, David (19 April 2023). "Chemist Warehouse hits magic 500" . AJP. Retrieved 12 October 2023.
  5. ↑ Ladhams, Tim (6 August 2023). "Chemist Warehouse: a healthy dose of growth". Franchise Executives. Retrieved 15 October 2023.
  6. 1 2 "Australia's Cheapest Online Pharmacy". www.chemistwarehouse.com.au.
  7. ↑ "The rise (and rise) of Chemist Warehouse". Roy Morgan. Archived from the original on 14 September 2017. Retrieved 14 September 2017.
  8. ↑ Stensholt, John (11 December 2023). "How Mario Verrocchi, Jack and Sam Gance built giant Chemist Warehouse, as blockbuster $8bn Sigma deal confirmed" . Herald Sun . Retrieved 21 January 2024.
  9. ↑ Thomson, James (11 December 2023). "The 100-year dream that powers Chemist Warehouse". Australian Financial Review. Retrieved 21 January 2024.
  10. 1 2 LaFrenz, Carrie (6 December 2023). "Chemist Warehouse heads for the ASX via Sigma deal" . Australian Financial Review. Retrieved 21 January 2024.
  11. ↑ Casey, Alex (18 May 2022). "The Chemist Warehouse effect". The Spinoff. Retrieved 12 October 2023.
  12. ↑ Van, Tong (25 October 2020). "Chemist Warehouse launches in Europe". Inside FMCG. Retrieved 12 October 2023.
  13. 1 2 3 Korporaal, Glenda (10 October 2019). "Chemist Warehouse opens shop in China" . The Australian . Retrieved 12 October 2023.
  14. ↑ Crawford, Laeta (23 January 2019). "How Chemist Warehouse plans to take over Australian beauty industry" . Herald Sun. Retrieved 12 October 2023.
  15. ↑ Hume, Myles (15 February 2023). "Chemist Warehouse and Peter Larsen join forces to 'disrupt' optometry industry". Insight. Retrieved 12 October 2023.
  16. ↑ LaFrenz, Carrie (31 July 2023). "Rich Listers, Chemist Warehouse in 'game changer' pharmacy plan" . Australian Financial Review. Retrieved 21 January 2024.
  17. ↑ Rose, Derek (11 December 2023). "Chemist Warehouse to land on ASX via merger with Sigma". The New Daily. Retrieved 11 December 2023.
  18. ↑ https://insideretail.com.au/sectors/chemist-warehouse-launches-into-dubai-202410
  19. 1 2 "It's the Bunnings of pharmacy: How Chemist Warehouse made a motza". www.news.com.au.
  20. ↑ "Chemist Warehouse and the hypocrisy of government rules". www.afr.com. 7 January 2016.
  21. ↑ Lam, Lawrence (8 June 2023). "The rise and rise of Chemist Warehouse". Morningstar. Retrieved 15 October 2023.
  22. 1 2 Millar, Royce; Schneiders, Ben (7 November 2016). "Australia's cheapest chemist? Watchdog probes Chemist Warehouse pay". The Sydney Morning Herald. Retrieved 4 December 2018.
  23. ↑ Ainsworth, Kate (11 December 2023). "Chemist Warehouse may be a discount pharmacy, but it's agreed to a merger worth $8.8 billion". ABC News. Retrieved 21 January 2024.
  24. ↑ Chrysanthos, Natassia (8 April 2023). "Chemist Warehouse, former health minister's lobby group among medical vape shareholders" . The Sydney Morning Herald. Nine Entertainment Co. Retrieved 25 April 2023.
  25. ↑ Pattabiraman, Rakshnna (8 November 2022). "Chemist Warehouse launches new marketplace with expanded offer". Inside Retail Australia. Retrieved 15 October 2023.
  26. ↑ Blake, Dean (9 October 2019). "'A real shopping experience': Chemist Warehouse's new bricks-and-mortar store in China". Inside Retail Australia. Retrieved 15 October 2023.
  27. ↑ Jones, Kate (19 March 2014). "Killing off the chemist" – via The Sydney Morning Herald.
  28. ↑ "ARN launches new digital station Chemist Warehouse REMIX". Radio Today. 3 September 2018. Retrieved 25 April 2023.
  29. ↑ "Has Chemist Warehouse got the Mix right?". Truly Deeply. July 2011. Retrieved 25 April 2023.[ dead link ]
  30. ↑ "Chemist Warehouse's bumper back-pay to staff". Inside Retail Australia. 30 November 2016. Retrieved 13 October 2023.
  31. ↑ Schneiders, Ben (28 March 2019). "Stunning win for Chemist Warehouse workers on both wages and labour hire". The Sydney Morning Herald. Retrieved 15 October 2023.
  32. ↑ "Jack Gance; Chairman and Co-founder, Chemist Warehouse; EY Entrepreneur Of The Year 2023 Australia". Ernst & Young. 2023. Retrieved 25 April 2023.
  33. ↑ "$1.35B 2023 Australia's 50 Richest Net Worth: About Jack Gance & family". Forbes. Integrated Whale Media Investments. 15 February 2023. Retrieved 25 April 2023.
  34. ↑ Murphy, Jason (22 September 2018). "Secrets behind Chemist Warehouse's success". news.com.au. News Corp Australia. Retrieved 25 April 2023.
  35. ↑ Schneiders, Ben; Millar, Royce (15 April 2019). "TV doctor and Chemist Warehouse scion warned for prescribing drugs to herself". The Sydney Morning Herald. Nine Entertainment Co. Retrieved 25 April 2023.
  36. ↑ Landy, Samantha (20 December 2019). "Chemist Warehouse co-founder Jack Gance's family buys Toorak mansions". realestate.com.au. REA Group. Retrieved 25 April 2023.
  37. ↑ Brook, Stephen; Hutchinson, Samantha (13 October 2021). "Chemist Warehouse owner Sam Gance buys $43m Toorak mansion". The Age. Melbourne: Nine Entertainment Co. Retrieved 25 April 2023.
  38. ↑ McMillan, Isabel (22 October 2022). "Millionaire businessmen turn major profit through cost of living crisis". news.com.au. News Corp Australia. Retrieved 25 April 2023.
  39. ↑ "50 most powerful retailers". www.insideretail.com.au. 15 January 2014.
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