Health makes wealth in slowdown season
Guardian Pharmacy’s corporate office in Gurgaon is bustling with activity, as young executives monitor the company's expansion plans. They have to open 70 more wellness stores by March 31, taking the total to 250.business Updated: Apr 29, 2009 00:17 IST
Guardian Pharmacy’s corporate office in Gurgaon is bustling with activity, as young executives monitor the company's expansion plans. They have to open 70 more wellness stores by March 31, taking the total to 250.
When most retail companies are under pressure, how come Guardian Pharmacy is expanding? “Health and wellness space has not been affected by the slowdown,” said Ashutosh Garg, founder and CEO, Guardian Pharmacy. “Further, we have kept our costs under tight control and have planned our expansion very carefully.”
When he raised private equity funding of Rs 100 crore in July 2008, the economic slowdown had started to effect the major economies of the world and investors were getting selective. “We were fortunate to have raised money from a very supportive investor on time.”
After remaining at the helm of large companies like Lockheed Martin and Hughes almost throughout his 25-year-long career, Garg decided to go it alone. When he left his job with Hughes to launch his own venture, he was one of the highest paid executives in India, according to a close friend, Alok Tandon, managing director, Sistema Shyam Teleservices Ltd.
As he wanted to get into areas where players were few, Garg opted to focus on retail in the wellness space. In August 2003, he came up with the chain of health and beauty retail outlets under the name Guardian Pharmacy. He opened the first store in Gurgaon and by March 2009, he had established 165 stores throughout the country.
“In our country, health and wellness space has significant growth potential, especially with highly fragmented market,” he said. “It is our view that the Indian consumer is looking for much higher reliability of medicines in an environment that is contemporary.”
The ongoing expansion is part of a larger plan to take the number of stores to 1,500 by 2015. “We have raised sufficient funds coupled with internal accruals to meet our expansion plans,” Garg said. “We are blessed with a strong and competent management team, which is driving the growth of the company.”
Financially too, the plans are ambitious: from Rs 95 crore in March 2009, Guardian hopes to double it to Rs 200 crore by March 2010. There are two drivers behind this growth — one, sales in the existing stores have increased --- and two, the number of stores is growing.
The growth is now moving beyond metros into smaller cities. “We are already present in 20 Tier II cities, including Lucknow, Allahabad, Kanpur, Sonepat, Ambala and Panipat,” Garg said, adding that the number of customers will increase from 6 million to 10 million this year. On the products front, the range is wide — from Ayurvedic juices, sanitary napkins and protein powders to cough syrups and various personal care products. To Garg, success isn’t a one-night stand but a result of years of hard work and determination.