In Focus: L Rowland

With more than 500 stores, it enjoys the distinction of elevated sales densities of £2,000-plus sq ft. The name is unfamiliar because, having grown largely by acquisition, local pharmacists’ names were retained, but rebranding means the Rowland fascia now accounts for most.

Rowland’s growth in its north Wales and northwest England heartland was rewarded with a ten-fold sales advance in the decade to 2009, including a four-fold increase in the first two years of the millennium. The slowest advance was in the latest year - only 1.5% - the only year there were no acquisitions. This lack of acquisitions is because Rowland’s parent since 1998, Germany-based Phoenix Pharmahandel, is part of the heavily indebted VEM conglomerate created by Adolf Merckel (who, when the group’s bankers were closing in as the global financial crisis took hold, committed suicide in early 2009).

Despite VEM’s crippling debt - with ‘for sale’ signs hoisted over generic drugs manufacturer Ratiopharm and Heidelberg Cement - the family has resisted reported approaches for Phoenix UK and Rowland. Among possible interested parties, Alliance Boots and Lloydspharmacy could fall foul of UK competition authorities, but the same might not apply to the Co-op or an outside candidate. The Merckel family was rumoured to be considering an IPO for Rowland, but the climate may not be conducive; a private equity-backed management buyout or break up are other options.