The Pharmacy from Warehouse chain is closing locations

The problems of the large pharmaceutical distributor Godovalov, which is facing bankruptcy, also affected the retail network of the owners of the Pharmacy from the Warehouse company. The chain, which had almost 800 locations at the end of June, is closing its locations and has already disabled online ordering. The most profitable pharmacies may go to competitors, but it was not possible to find a buyer for the entire chain due to strong dependence on Godovalov, market participants say.

The Pharmacy from the Warehouse chain is closing its outlets, two participants in the retail pharmaceutical market told Kommersant. The “Pharmacy from the Warehouse” website was not working as of October 26, making an order in the application is impossible, Kommersant was convinced. Regional media also wrote about the reduction in the number of Pharmacy from Warehouse outlets in Perm, Novosibirsk, Tyumen, the Yamalo-Nenets Autonomous Okrug and Omsk. The Kommersant network itself did not respond.

“Pharmacy from the Warehouse” was created in 2009 by Perm entrepreneurs Nikolai Shavrin and Andrey Godovalov. At the end of the first half of 2023, it ranked 20th in the ranking of DSM Group pharmacy chains with revenue of 6.7 billion rubles, including 799 points at the end of June.

Problems with Pharmacy from the Warehouse arose following difficulties with the pharmaceutical distributor Godovalov, which is owned in equal shares by Messrs. Shavrin and Godovalov. At the beginning of October this year, the closure manufacturer Eurocap and Sberbank filed for bankruptcy of Godovalov. A few days later, the distributor announced liquidation. At the end of October, Nikolai Shavrin and Andrey Godovalov notified of their intention to file for their own bankruptcy. The distributor also did not provide a comment.

Difficulties for Godovalov arose in August 2022, when the tax service assessed the distributor an additional 376 million rubles. taxes and contributions. The tax service considered that the Pharmacy from Warehouse chain was managed by many companies, each of which applied special tax regimes. Funds to pay off the debt could be found, but this is usually followed by blocking of accounts, says managing partner of Control Systems Design Pavel Lisovsky. Then, he said, creditors begin to demand debts, and suppliers begin to reduce deferred payments. In the case of Godovalov, Sberbank and Magnit Pharma were in a hurry, says a Kommersant source in the pharmacy market. Magnit did not respond to Kommersant, and Sberbank declined to comment.

As stated in the court materials, Godovalov was the only supplier of the Pharmacy from Warehouse network. Pavel Lisovsky calls the standard situation in which a pharmacy chain is 80–100% supplied with goods by a distributor that is part of the same group. As RBC reported in September, Sberbank tried to sell the business of Nikolai Shavrin and Andrey Godovalov. But two top managers of pharmacy chains say that it was not possible to find a buyer for Pharmacy from Warehouse. According to one of Kommersant’s interlocutors, the network included small and unprofitable points. Other players today are trying to buy out the chain’s most marginal pharmacies, another Kommersant source says.

According to Pavel Lisovsky, Pharmacy from the Warehouse was able to save on logistics thanks to its own distributor, and changing it would mean changing the entire business model. Although RNC Pharma development director Nikolai Bespalov believes that “Pharmacy from a warehouse” can still attract a potential buyer. “This is too big and visible an asset to disappear,” says the expert. DSM Group CEO Sergei Shulyak says that the situation with Pharmacy from the Warehouse is rather a special case associated with the attention of the tax authorities, but in general pharmacy chains feel quite confident. According to DSM Group, drug sales in pharmacies in the first eight months decreased by 0.4% year-on-year, to RUB 893.7 billion. Pavel Lisovsky adds that in the Russian Federation there are pharmacy chains that retain many companies for simplified taxation, and attention to any of them could result in a similar lawsuit.

Polina Gritsenko