Lifetime Healthcare acquires Pill & Powder

Lifetime Healtcare, promoters of LifeKen pharma chain, on Thursday acquired Bangalore-based pharma retail chain, Pill & Powder, for an undisclosed sum.

The acquisition, which has added 11 stores to LifeKen, has made it the second largest organised pharma retail chain in south India with around 60 stores and the largest chain in Bangalore where it has over 40 stores. Apollo Pharmacies is the largest organised pharma retail chain in south India with around 300 stores.

Pill & Powder was promoted by Vardhman Pharma, a pharma distributor. Said Mahedra Chowhan, managing director, Vardhman Pharma: "We decided to dedicate our energies and resources to build our pharma distribution business and this is the reason for us to exit the retail pharma business."

"The acquisition gives us greater accessibility as Pill & Powder is the oldest pharma retail chain in Bangalore and has a good reputation with the customers," Lifetime's CEO M C Kini said.

Lifetime Healthcare plans to expand to 200 stores in one year and 700 stores over the next three years. However, the company, which has stores only in Bangalore and Chennai currently, does not plan to open stores in north India for the next two years.

"Hyderabad will probably be the next city where we will open stores. We are also looking to expand to cities like Coimbatore and Mysore in the next 5-6 months," Kini said. The company plans to invest Rs 40 crore in 200 stores in the first phase. LifeKen expects a turnover of Rs 30 crore at the end of the current financial year (including that of Pill & Powder) and a turnover of Rs 80-100 crore at the end of the next financial year.

Kini believes that organised pharma retail chains have an advantage over regular drug stores as due to the size and scale of the chains, they are able to give better resources and delivery to customers.

However, unlike the Chennai-based retail chain Subhiksha, which also operates a pharma counter, the company does not plan to be a discount chain. "We believe discounts are not the way to go about it, instead we will focus on giving value-added services to our customers," Lifetime's COO A Suryanarayanan said.

Organised pharma retail chains are being seen as the next big thing in retail as companies believe it has a lot of untapped potential.

The pharma retail industry in the country is estimated to be worth Rs 35,000 crore to which the organised pharma retail sector contributes only 2 per cent. Of the 4,500 pharmacies in Bangalore, only about 140-150 outlets fall under the organised pharma retail chains category.