Superpharm chain delays payment for goods sold in north
Superpharm, which is considered one of the most successful retail chains in Israel, has told its suppliers that it is postponing payment for merchandise supplied to northern branches for 30 days, TheMarker has learned.
The chain said in response that "in the past two weeks the chain has made a great effort to keep the 20 branches in the north open and active, despite the drop in revenues, and therefore we appreciate the compliance of all of our suppliers with our request, and thank those of them that came to us on their own initiative."
Superpharm's decision has led to disgruntlement among the suppliers. "The chain is cynically exploiting the war on the backs of the suppliers who have incurred damages far greater than theirs," said one source. For the suppliers, some of whom are situated in the north and have to pay their employees despite their being absent from work, and despite the drop in their revenues, the postponement of the Superpharm's payments is critical. As far as is known, the large retails chains, such as Supersol and Blue Square, which also have branches on the front line, have not postponed payments.
Superpharm, the country's largest pharmacy chain, has 120 branches around the country, only 20 of which are in the north. Since no statistics are kept concerning the sales of pharmacy chains, it is impossible to estimate the damage to their sales caused by the war. In the case of the food chains, it is clear that the war has harmed sales in the north, bu t sales in the south and center have risen and overall sales have remained stable, thanks to the northern residents who are staying in other parts of the country. However, a large proportion of the items sold by Superpharm are considered luxuries - unlike food - and therefore it is possible that the damage to Superpharm's sales has been greater.
The chain, which owned by Leon Koffler, is a privately-owned company. It finished 2004 with sales of NIS 2.31 billion, but its net profits are only 2 percent of revenues. These figures come from a legal opinion, which the chain presented to Antitrust Commissioner Ronit Ken, opposing the proposed merger of Supersol and NewPharm at the beginning of the year.
According to U.S. magazine Chain Drug Review, which chose Superpharm CEO Lior Reitblatt as world retailer of the year in 2005, the chain's sales grew by 5.8 percent in 2005, reaching $500 million.
Superpharm also has branches in Poland and China.