Childhood dreams do come true; they certainly did for Alexander Fenech and his pal Robert Spiteri.
They’ve been friends since they were seven years old, and now they manage the leading pharmacy chain in the country as business partners.
In the mid-1990s, Fenech and Spiteri, both pharmacists, were studying for their MBAs. “When you’re in class you get loads of ideas, and we decided we should go into business.”
The pair “toyed” with importation “for a very brief time and started bidding for government tenders”. The import business, however, didn’t appeal much, yet both harboured “fantastic dreams”.
“We wanted to become the largest healthcare company in Malta,” says Fenech. And importing pharmaceuticals was not the route to achieve that ambition.
“At the time, the market was dominated by five or six companies,” explains Fenech, “and they held the distribution rights for the major pharmaceutical brands”.
That avenue did not seem very promising, but with some 200 pharmacies operating at the time and most being owner-managed, “we saw an opportunity for whoever managed to consolidate that part of the value chain... we saw an incredible opportunity in actually creating a group of pharmacies”.
Running pharmacies would give them control over what they felt was “the most important part of the value chain, the consumer”.
When people visit a pharmacy with a doctor’s prescription, they frequently also purchase other non-prescription items, and that’s where the opportunities lie, says Fenech.
“That’s where the idea came from”, continues Fenech, and shortly after, their company was established. That same year, 1998, they acquired their first pharmacy, an existing one in Qormi.
In Malta, says Fenech, new pharmacies are difficult to establish, but have to be bought. The number is controlled by “demo-geographic measures”, and with one pharmacy per 1,700 residents, Malta already has the highest concentration in Europe.
We decided to put the customer at the centre of our business
In the United Kingdom, the next most competitive market, there’s one pharmacy for every 6,000 persons. Moreover, by 2018, Malta also had the highest number of practising pharmacists in the EU – 129 for every 100,000 inhabitants.
And it was there, in their Qormi pharmacy, that the two partners put into practice their vision. Fenech had spent a lot of time in Britain in the early to mid-1990s and felt there was a major disparity in the levels of customer service between Malta and the UK.
“We decided to put the customer at the centre of our business,” says Fenech, adding: “And that’s what we did, and before we knew it, we had doubled the sales at our first pharmacy.
Alexander Fenech“To provide the best customer service possible, the most obvious thing you need is to ensure that you design jobs in your company that enable that,” explains Fenech. As he and Spiteri worked at their Qormi outlet, they developed ideas “on how to make the lives of future colleagues better by tweaking job functions”.
The partners thought of centralising operations, for instance, so that pharmacists would not have to deal with mundane chores such as ordering or pricing products. Today, it’s all done for them. Every day each pharmacy in the group gets a delivery from the company’s warehouse, and counter staff simply shelve them. In this way, staff need not shift their focus from customers.
“Our retail staff have only one thing that concerns them, and that’s customers. And that’s been our success story,” beams Fenech.
Expanding locally has always been their primary goal but going international is also a vision the partners have. “Malta is just a first step for Brown’s; the UK has always been a market of interest,” Fenech says, “and we wanted a name that travels well”.
In 2000, the partners bought Brown’s Pharmacy in Naxxar – the seller had obtained the name from a long-closed Brown’s Pharmacy in Sliema – and felt this was the name their company should adopt. It was also their third pharmacy.
Over the next two decades the company has grown, and in 2020 it bought out one of its competitors, JP Pharma, who owned five pharmacies. Today, Brown’s own and operate 24 pharmacies in Malta, but none in Gozo, and has some 160 employees.
In June 2021, during the height of the pandemic, the company went public with a €13 million bond issue. The timing “felt right” to Fenech, and he was right; investors purchased the bonds “in minutes”.
One of the reasons for the bond issue was to allow Brown’s to expand internationally, and the UK is a potential market, notwithstanding that it’s already a saturated one.
“We would do it differently, we wouldn’t necessarily go down the brick-and-mortar route,” says Fenech, “I wouldn’t be looking for pharmacies in the high streets,” he adds.
What he is looking at is the “internet side of pharmacies, which is well developed in the UK”. He says the company has made “a pretty decent investment in building an application that takes the customer all the way through the journey from needing a doctor to actually having the prescription dispensed at home.
“We know it’s not possible to introduce this in Malta, because of existing legislation,” notes Fenech, “but overseas, we see a lot of potential for this app. The technological way,” he adds, is “where we see the future of pharmacies”.
Fenech is also looking at eastern Europe; Romania is one possible market. “We’re exploring,” he says, adding: “Brown’s will not be limited to just Malta”.
The company’s 52-year-old CEO, Alexander Fenech, is adamant about expanding internationally, but also aware that Brown’s cannot compete with the “big boys”, like Boots in the UK. “But we’re definitely looking at doing some things differently”.