In Interviews

Follow this topic

Bookmark

Record learning outcomes

Exclusive: Employee-owned chain Greenlight Pharmacy is taking on external investors for the first time. Directors Sanjay Ganvir and John Foreman tell Arthur Walsh why

In early August, independent chain Green Light Pharmacy announced plans to ‘open their doors’ to external investors after 26 years as a fully employee-owned cooperative, seeking £2m for up to 25 per cent equity in the business.  

The news – announced as a bid to “support our recent momentum and power our next phase of UK-wide expansion” – caught P3pharmacy’s attention. Does selling a stake in the UK’s first employee-owned pharmacy signal a fundamental shift in its ethos? 

But when I speak with superintendent pharmacist Sanjay Ganvir and founding director John Foreman, they tell me it’s not as dramatic as that. “It won’t be a change from how we operate,” Foreman tells me. “Our ownership model is employees and their families. We just saw an opportunity with the changing landscape to grow and expand; you need finance to do that, and the best way of raising it is to open up to outside ownership”. 

Foreman says they are “very clear” that no more than a quarter of Green Light is up for sale. “Below that, there’s no control that any one person can exercise over the 75 per cent employee-owned part of the business. It’s sort of like a private-public partnership.” 

“We do want like-minded individuals,” he adds. “We’ve already had some interest from pharmacists and other people in the sector. If people want to come on board and actually contribute, that’d be great as well.” 

“It’s all about collaboration; all our 250 staff members are co-owners, so we are hoping to attract more than just an investor; perhaps someone in the sector, or it could even be a related company that wants to come on board.” 

Employee ownership is still fundamental, says Ganvir. “Everybody when they’re young is idealistic and wants to change the world. But then as you get a bit older, you think, can we change the entire world? Possibly not, but there are bits where we can help, and that’s the bit where we had agency, i.e. the company we set up.”

A unique chance

There are many other cooperatives running in the UK. “We knew it wasn’t a completely unique idea – although for a long time we were the only employee-owned pharmacy in the country. The idea was to set up a company where everybody owned it, both literally and metaphorically.”  

Giving employees shares in the company gives some of them a unique chance to create wealth, he adds: “The vast majority of staff who work in a pharmacy are local people who are non-graduates and perhaps don’t get the opportunity to have assets. Our philosophy is that everybody in the company owns an asset. 

“It’s been hugely successful. Of the people who joined 20-25 years ago – and up to probably 15 years ago – all own their own houses and all their kids have gone to university.” 

All this has a strong impact on retention, says Foreman: “The first pharmacy from 25 years ago has got most of its original staff still there. You do get more of a churn of pharmacists. Some will want to move out of community pharmacy - we do have a whole practice pharmacist division as well - but they might want to go into hospital or somewhere else. 

“Our pharmacies are set up with joint management, so there’ll be a dispensary lead managing the pharmacy with the pharmacist. If the pharmacist moves on after three to five years or goes into our senior management team, then it’s hugely important you’ve got that lead dispenser there to have that continuity.” 

The company sees itself expanding outside the South-East England region for the first time. Foreman explains: “We’ve got very good senior management team that was set up for our current size of 22 pharmacies. And with remote working, we’ve probably got a team in place where we can easily go up to 30-35 pharmacies without increasing the senior management team, greatly. We’re introducing some great IT systems.” 

They decided to take that next step: “Some colleagues I know have gone from 10 stores to 30 or 40, and they say that if you have a good senior management team and the right systems in place it’s not that much more work. Sanjay’s the superintendent and has a great team to drive that clinical focus and actually deliver it. We feel the time is right.”  

These latest plans for growth come on the back of acquisitions made in the last two years. “We picked up a group of five branches in South London, that was the biggest we’d done; normally we have just bought single units,” says Foreman.  

Part of the motivation to expand comes from a desire for more future colleagues to benefit from this philosophy, says Foreman. “If we can grow from 22 to 30 branches, that means there are 30 branches where staff have that opportunity. I worked in South London in a pharmacy where the staff had been there for 25 years and still lived on the local estate, and they’d really made all [the pharmacy’s] money. 

“That was not at fault of the owners. They were paying them very well, but they had no stake in the business, and they were never going to get off the estate; they were never going to buy their own place on a pharmacy support wage. Whereas all our staff have got their own houses.” 

Does that egalitarian approach to ownership of the business extend to giving staff a say in decisions around business operations? It does, Foreman replies: “Like every democracy, it is quite laborious.” Management meetings have representatives from every department and proposals on things like pay are put to all staff members to vote on. 

He adds: “That’s from ours down to the delivery person’s wages - it all gets voted on. In our last meeting, there were some things that I didn’t get that I wanted and something Sanjay didn’t get that he wanted. It’s not just us as directors deciding on wages; our staff are.”

The positive impact on staff engagement and retention is “unbelievable,” says Ganvir. “There is now a name for this: corporate social responsibility. This is a big thing for corporate investors. There’s a whole lot of evidence to show that employee-owned companies perform really well and have lower staff turnover. I didn’t realise it had this label 25 years ago, but it turns out economists have done research into what we just thought was this little thing we were doing.” 

Naturally, the decision to raise equity was also put to the staff and “got their full support” after a rigorous debate.  

Clinical opportunities 

Why grow the business now; is this not an uncertain time for England’s pharmacy sector? It’s partly due to the rise in clinical opportunities, they reply. 

“Along with employee ownership, having a clinical focus and thinking about the potential of pharmacy to impact health systems was another of our founding principles,” says Ganvir.  

“Back in 1999, we got rid of all the perfume cabinets and a whole bunch of cosmetics to use that space for consultations. At the time, people wondered what on earth we were doing. We did innovative stuff around medicines adherence, were among the first to do vaccinations, and John was a pioneer in smoking cessation.” 

These things are mainstream now but “were really out there at the time,” says Ganvir.  

“We’ve been waiting for 25 years for this. We’ve had almost every health minister come to one of the pharmacies to talk about pharmacy’s potential, but I think there is a real step change with what the Labour government has been saying. Community pharmacy was mentioned in their manifesto, that’s never happened before.” 

“With the 10-year plan we think there’s a real opportunity now. I personally think community pharmacy is really well placed to deliver a load of new services, so perhaps this is the moment we’ve been waiting for?” 

Private and NHS services

What opportunities do they now have in their sights? “It’s NHS, it’s private, it’s social prescribing,” says Ganvir. 

“One of the great strengths of community pharmacy is that it is literally embedded in local communities,” he explains, citing the research that shows it is the one branch of the NHS that bucks the inverse care law.  

“That accessibility is absolutely unique, so whether it’s private services, NHS services or more social initiatives, the community pharmacy network is a great asset. Coming back to the 10-year plan and the three shifts, pharmacy is so well-placed to support government to deliver on what it wants to do.” 

Next steps 

I ask the pair about the immediate next steps for Green Light. “We see the capital raise being wrapped up well before Christmas,” says Foreman. “We don’t think it’s a big ask considering the interest that we’ve had already.” 

And hitting the 30-store figure could definitely happen within the next 18 months: “We’ve got a couple of acquisition targets where people want to sell and join us, so they won’t be retiring. 

“That’s a big opportunity for them – to not be alone running three or four pharmacies. They’ll be part of the Green Light team as well as being a shareholder. 

“I think it’s good to try and inspire some other pharmacies out there to maybe run a similar model,” says Foreman. 

Having seen friends run a company singlehandedly and the toll it can take, he muses: “That is actually not a good place for your mental health, really. It’s better to be a team.”