Over the past 18 months, a larger than usual number of pharmacies have been placed into administration. A great number of these pharmacies have been located in shopping centres. Accordingly, demand for pharmacies in these locations have experienced significant decline and the market is now very cautious of pharmacies located in centres. But are they really that bad?
Pharmacies in centres have traditionally been sought after businesses. Often much larger than their Strip Pharmacy counterparts and with a stronger retail base, these businesses were often regarded as best-practice to diversify the offering of the traditional prescription business and boost the Gross Margins of the pharmacy.
However, the while the greater reliance on health & beauty certainly resulted in increased performance of the business through the strong retail component, this model was not more susceptible to trends that affected the greater retail environment. With the downward spiral in retail and diminishing foot-traffic in centres, many of these businesses faced strong decline in sales and margins, however rents remained high. As such, may businesses in these sites have not survived.
Despite the decline in centre performance, many landlords have not provided reductions in rents. As a result, pharmacies in centres are now paying anywhere between 6% and 10% of their sales in rent.
But despite the doom & gloom, there are still viable opportunities in pharmacies in centres. Many of these businesses are still making money and those with a strong business case are performing well.
With the recent end to the 2011/12 Financial Year recently past, full year financial statements will be shortly available. With these full year figures in hand, it presents a great time to sell a business - with full year figures to support the performance of the business.
As a business owner, you will understand that to get the best out of your business you should focus on what you do best and let others manage the rest. If you're a fantastic manager, you will take the role of management and employ others to provide the day-to-day services. If you're fantastic at providing a service, you will deal with customers and employ competent managers. When selling a business, professional business brokers are well versed in the marketing and selling of a business. Let us guide you through the sale of your pharmacy to ensure the best outcome for you and your business.
