Chemist Warehouse is the Bunnings of pharmacy, turning over $4 billion a year for its secretive owners

IT STARTED with a single store, now Chemist Warehouse is Australia’s biggest health and beauty retailer — and its secretive owner is rolling in cash.

Chemist Warehouse founder Damien Gance, left, is pictured with a franchisee in 2005.

WHEN Chemist Warehouse sold $2 million worth of stock in 13 minutes, founder Damien Gance barely batted an eyelid.

In a sign of just how big the chain has become, Mr Gance was pleased but relaxed with his company’s record-breaking sales result — which pales in comparison to the billions of dollars the family-owned business turns over annually.

“It’s another cog and business we’re trying to drive and promote,” Mr Gance told news.com.au.

But, he said, while sales into China provided a growing revenue stream, “they are not our primary business”.

As Australia’s number one health and beauty retailer, the Chemist Warehouse Group sells $4 billion worth of medicines, vitamins and beauty products each year through its Chemist Warehouse, My Chemist and My Beauty Spot brands.

On Friday, the company hosted Paris Hilton at Chemist Warehouse Westfield Doncaster in Melbourne, where the hotel heiress launched her new Gold Rush fragrance.

ALIBABA’S #1 OVERSEAS VENDOR

Chemist Warehouse has just marked its second year in a row as the top-ranking overseas vendor of Chinese e-commerce giant’s 11.11 Singles Day shopping festival.

Beating its own record from last year’s sale, when the retailer had only been on Tmall Global for eight days, the company sold more than $25 million worth of stock in 24 hours on November 11.

Chinese consumers snapped up thousands of pallet loads of vitamins and beauty products revered for their “clean and green Australian origins”, at discount prices — making Chemist Warehouse the first overseas merchant in history to achieve more than 100 million yuan on Singles Day, double the sales of American discounter Costco.

Last year’s sales were “truncated by lack of stock”, Mr Gance said, with inventory running so low by the halfway point that products had to be pulled from the platform.

This time around, 2,500 pallets were loaded with product ready to ship to China at the click of a button.

THE BUNNINGS OF PHARMACY

Founded in 2000 by Mr Gance and his notoriously secretive family, the chain known for its bright fluoro discount tags now has 330 stores across the nation, along with dozens of Chemist and My Beauty Spot stores.

Some two million Australians walk through their doors each week, making its owners — the Gances and their partners, the Verrocchis, who rolled out the business without the need to raise outside capital — very rich.

It all started with a single store and the dream of transforming the nation’s retail landscape.

“I think everyone has grand plans and grand visions when they start a novel new business,” Mr Gance said, when asked if he envisioned the brand achieving this level of success.

“I dreamt it would be this big, but did I realistically expect it to be this big? Probably not, And we’re obviously thrilled that the Australian public really have taken to what we offer in terms fo discounted healthcare products to the community.”

Unlike Aldi, which focuses on home brands, Chemist Warehouse sells branded product at a discounted price in the same vein as electronics retailer JB Hifi.

FEDERAL PHARMACY REVIEW

Chemist Warehouse is not without its critics, with a focus on price making its business model controversial.

Using a complex franchise structure to get around strict regulations that limit how many pharmacies an operator can own in any one area — the official limit is six in any state or territory — Chemist Warehouse has been dubbed the McDonald’s of pharmacy.

A federal government review of the sector, examining the industry’s business models, location rules and fees, will report back in May next year.

The Pharmacy Guild and pharmacists’ union have taken aim at the discount behemoth, saying its approach threatens both healthcare standards and employment conditions in the industry.

But Mr Gance dismissed the controversy, saying “in sporting parlance, we play the ball and not the man ... We don’t engage ourselves in worrying what others are doing.”

He said the company would continue to do “what we believe is best for our business, which is grow our store network, improve our price offering and expand our range”.

“We spend all our time, efforts and energy endeavouring to continue to provide the best healthcare product at the best price to the Australian community,” Mr Gance said.

Dana McCauley travelled to China for Alibaba Singles Day as a guest of Alibaba

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