IN AN open letter to franchisees this week, Priceline Pharmacy's chief customer officer Richard Pearson has hit back at "inaccurate" media reports around Infinity's entry into administration last year.
Pearson confirmed that since being operated by administrators for a few weeks now, "the [Infinity] stores are running well with stock on the shelves, team members being paid and importantly, customers receiving a high level of service".
Receivers KPMG told Pharmacy Daily the receivers are continuing to stabilise operations of the stores and work through a sales process, as flagged when appointed in Dec last year (PD 18 Dec) .
Pearson also provided franchisees with further details about the lead-up to the decision to appoint receivers and administrators for 56 Infinity pharmacies.
"Our decision to appoint receivers and administrators was not taken lightly," he wrote.
"As many of you know, API worked to support Infinity management for many years to try to put the business on a sustainable financial path.
"Ultimately, Infinity's financial collapse was driven by its management's aggressive acquisition of new pharmacies, funded via expensive, high-interest rate debt.
"This expansion came at the expense of Infinity meeting its financial obligations, including not paying us and various other creditors, to supply products."
Reports in the Australian Financial Review suggest that Infinity Pharmacy's secured lenders are now owed more than $400 million, Wesfarmers $110 million and major banks about $145 million.
Pearson said that upon learning that despite its deteriorating financial situation, Infinity's management were looking to acquire more pharmacies with further debt, Priceline felt they had "no option but to draw a line in the sand".
"The receivership/administration process is in the best interests of these community pharmacies, and will support the ongoing delivery of reliable and quality health outcomes for customers over the long term," he stated.
Priceline franchisees have been provided with resources to help answer any questions about the situation from their teams and customers.
"We remain committed to working with our franchise partners who share our vision to grow the Priceline Pharmacy brand and support the health needs of their local communities," Pearson concluded. KB
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