New Pharm Drugstores Ltd. has closed its branch in the Umm al-Fahm mall one year after opening it. The decision to leave the Arab town was the result of heavy losses by the branch.
New Pharm said, "We wanted to have a branch in the first Arab mall located in the heart of an Arab town. The problem is that the Arab sector has a great many habits that we don’t know how to read from the commercial aspect. For example, some clans will never shop in this area because they are served by a different doctor. Despite our wish to foster business in the Arab sector, we did not obtain cooperation from the municipality or public officials. In the end, we concluded that we had no choice. We wanted to think about coexistence, but when we're talking about losses, we decided to cut them in a pure business decision."
In contrast, New Pharm says that its branch in the Druze town of Daliat al-Carmek is a success.
New Pharm has 53 branches. The company had NIS 143 million in sales for the third quarter, but posted an operating loss of NIS 600,000 and a net loss of NIS 3.3 million. The company posted an operating profit of NIS 1.7 million (1.2% of sales) and a net profit of NIS 400,000 for the corresponding quarter of 2006.
Published by Globes [online], Israel business news - www.globes-online.com - on November 29, 2007
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