Pharmacy group in admin
Pharmore was started by John White in 1992 and has 17 independently owned and operated outlets.
Brooke Bird, the insolvency firm appointed for the administration on February 5, says the retail pharmacies are not impacted by the appointment and will continue to trade.
Each of the stores has its own buying, supply, and account payment arrangements and suppliers have been requested to deal directly with the individual pharmacies.
The administration involves the company that provided retail support services to the pharmacies.
Pharmore is one of a number of pharmacy franchise groups to have expanded rapidly in recent years, underpinned by generous trading terms from pharmaceutical wholesalers.
Financial difficulties at Sigma and Australian Pharmaceutical Industries resulted in tighter credit terms that curtailed the expansion of pharmacy franchise groups and forced Pharmore to restructure.
Brooke Bird notes that the sector has been impacted by changing government regulations and payment regimes under the Pharmaceutical Benefits Scheme, but Inside Retail Premium understands Pharmore was also adversely affected by the expansion of competitors such as Chemist Warehouse and Priceline Pharmacy.
The full service retail pharmacy model is believed to have struggled with historic debt and the emergence of other discount pharmacy brands.
The administrator appointment resulted from the inability of the company to undertake a necessary restructuring of its operations and an overhead structure that exceeded its revenue base.
The first meeting of creditors will be held on February 16 in Melbourne’s Hawthorn.
This story first appeared in Inside Retail PREMIUM issue 2033. To subscribe, click here.
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