Sam McCauley’s prescription for expansion of pharmacy chain
THE Wexford-based pharmacy chain boss Sam McCauley has hinted at the possibility of the company being floated on the Irish Stock Exchange.
In an indepth interview in the Sunday Independent, the Enniscorthy man said the company is open to bringing in a new equity investor and may even consider listing the business on the Stock Exchange.
Mr. McCauley said the board of the company which includes business expert Bernard Somers, is looking at ways to expand the business even further.
‘We could look at lots of options including an equity partner to make a quantum leap in the business,’ he said.
‘I don’t see any reason why an Irish pharmacy group can’t hold the same position as Musgraves or Dunnes Stores in the grocery market, in other words be right there with the market leaders.’
‘We’re on their heels but there is a gap. I see a unique opportunity for a uniquely Irish model.’
The McCauley health and beauty chain invested €2 million in the recent opening of two new shops in Tipperary Navan, bringing the total number of stores to 30 and is targeting revenues of €90 million next year which will exceed its pre-recession turnover although this will be over a larger number of stores.
Commenting on a welcome return to growth in the retail sector, he said ‘it’s not a gold rush. You’re fighting to come up with more innovative ideas as to how you stay on trend and make sure you are going to be interesting.’
It is now 25 years since he opened the first branch of the chain in Redmond Square, Wexford in 1991 and it is 60 years since the first McCauley chemist was set up by his parents in Enniscorthy.
Sam McCauley is the largest shareholder in the pharmacy group with members of management and pharmacists among the other investors in the company.
He said the company is ‘very much on the path of organic growth’ and in addition to the two new stores this year is also expanding existing shops, taking advantage of lower property prices.
‘We’re maximising out the existing portfolio, adding on new greenfield sites and may do selective acquisitions. We see lots of opportunity to expand the busienss. We’re now in a better position than ever before to move the business forward to a new level.’
The McCauley model relies heavily on upmarket cosmetics, photo services and other retail offerings with 60 per cent of revenue coming from shopfront and 40 per cent from the prescription dispensing business. This compares to 70 per cent of turover from dispensing in the average Irish pharmacy.
It is a blueprint started in the Redmond Square Wexford store when McCauley’s moved into what was then considered to be an enormous amount of space at 4,000 square feet.
‘We put in a beauty salon, hair salon, one-hour photo, all the prestige beauty brands as well as jewellery and handbags. It was the first of those type of stores and we had first mover advantage.’
‘ The thinking was that there were a lot of really good family pharmacies. So you’re going to have to really differentiate yourself. We did a lot on branding. We brought in graphic designers. We had radio jingles, cinema advertising.’
The former Enniscorthy Fianna Fail councillor said he never started out to open a chain of shops.
‘It was a very incremental process. But that was probably the first time we had the vision to say this is a formula that works.’ The model was replicated in Carlow and then expanded until reaching a period of consolidation during the economic downturn.
‘Everyone says you need a good recession to sharpen your business. We consolidated, paid down debt, reduced and cut costs. You have to have a growth-oriented dynamic in your business. It’s an old adage, if you’re not growing you’re going the other way,’ he said.
“We’re now in a better position than ever before to move the business forward”