How the Gance brothers built a billion-dollar pharmacy empire leading with retail

After the successful reverse takeover of Chemist Warehouse by Sigma, there is one name top of mind in the retail industry: Gance.Sam and Jack Gance have been retailing royalty since long before the aforementioned $30 billion merger was sealed at a Melbourne suburban pub in a 16-minute-long meeting.Alongside co-founder Mario Verrocchi, the brothers have disrupted the industry by upending the margin structure in pharmacy – and that was before teaming up with Chemist Warehouse’s supplier, Sigma.The billionaire co-founders are not treating the merger as their grand finale, instead, they are looking to further scale the business which already has a retail footprint of almost 1000 stores and annual earnings of $1 billion.While the Chemist Warehouse-Sigma merger took just over a year to be approved by regulators, the retail giant’s success story really originates all the way back in 1972.Small beginnings In 1972, the Gance brothers bought their first pharmacy as graduates in the Melbourne suburb of Reservoir and went on to buy another pharmacy three years later – located only 300 metres away from their first storefront.Verrocchi joined them as an intern in 1980 after struggling to find work and was offered the job by Sam Gance because he could speak Italian – a desirable skill for a newly graduated pharmacist based in an area with a lot of Italian migrants. While laying the foundation of what would soon become a retail-pharmacy empire, the Gance brothers started building their Le Specs and Le Tan brands in 1976 before ultimately selling them in 1991. A sale that Sam Gance has referred to as “bittersweet”.Meanwhile, the brothers slowly but surely expanded their pharmacy footprint from two stores to 35, a chain that would eventually be rebranded as MyChemist, while scaling their wholesale distribution business. Distribution machineIn 2000, the Gances together with Verrocchi opened their first Chemist Warehouse location under the fluorescent yellow and blue banner that, for Australians, has become synonymous with discounted prices.The success of Le Specs and Le Tan informed Chemist Warehouse’s business model. By giving more floor space to non-prescription products and offering significant variety in every product category, they ensured there was something for every customer.The growth of Chemist Warehouse has been steady. Since the opening of its first interstate store in Cairns in 2004, Chemist Warehouse now has over 535 stores across Australia and  employs more than 20,000 people.But the pharmacy chain has plans that far exceed Australia’s border, launching into New Zealand in 2017 with its first store and growing its footprint there to a total of 48 stores quickly.Now, Chemist Warehouse has stores internationally across New Zealand, Ireland, China and most recently Dubai.Binned IPOAfter years of rumours of an initial public offering float and reported closed-door dinners at Sydney’s Rockpool restaurant with Macquarie Capital’s investment banking team, Chemist Warehouse finally revealed its hand.As it turns out, the founders were deterred by an IPO due to the cost, they wanted a deal that was effective and inexpensive – not too dissimilar to Chemist Warehouse’s offering to customers.In June 2023, Chemist Warehouse signed a five-year supply contract with Sigma Healthcare to start in July 2024.And in December 2023, before its supply contact with Sigma commenced, Chemist Warehouse announced its intention to merge with Sigma through a reverse takeover – giving the pharmacy chain the ASX listing and access to market capital it has been after.