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Guardian Pharmacy

TORONTO - Another retail pharmacy giant has emerged in Canada, and its name doesn't start with an "S."

Katz Pharmacy Services announced Feb. 9 its official change of name and company logo to Katz Group Canada Ltd. That's simple enough. But the story at Katz goes far beyond a new corporate nameplate. The logo is emblematic of far bigger changes under way behind the scenes, as company planners work to integrate a far-flung retail network that has rap idly grown to more than 1,500 pharmacies under seven banners-and to position that network as a cost-efficient national drug store powerhouse

The change reflects a new drive to build the Katz brand "by weaving together commonality and extending the best of our programs nationally," said president and chief executive Larry Latowsky.

"Integration has been under way for some time," said Latowsky, who has also served as chief executive of the company's largest retail division, Drug Trading Co. Ltd., since October 1998. "We already have integrated our MIS, merchandising, marketing and store systems support departments. And we've integrated our executive groups ... so we're operating as one entity."

The result should be "a watershed year," said Katz Group chairman and founder Daryl Katz, who launched the company in 1992 by establishing the Canadian franchise of Medicine Shoppe International. "As the umbrella company for the largest pharmacy network in Canada and with new visionary management, Katz Group Canada will lead the industry in delivering the best in pharmacy health care across Canada."

Since its beginnings just 11 years ago, Katz Group Canada grew rapidly through a series of bold acquisitions to become, in the company's own words, "Canada's largest integrated pharmacy network," responsible for filling "1-of-every-3 p prescriptions in English Canada." Its retail divisions now include Pharma Plus Drugmarts, the 115-store Pharmx Rexall operation, Herbies/Payless, Medicine Shoppe Canada, and Drug Trading Company Ltd., a 100-year-old company that operates and services roughly 730 corporate and independently owned drug stores under logos like Guardian and I.D.A.

Katz also owns a pharmacy and retail software and hardware development firm, ProPharm Ltd., as well as the MediTrust Pharmacy national mail-order pharmacy group, D.C. Labs Ltd., and the Rexall manufacturing and packaging operations. The company has headquarters in Edmonton, Alberta, with corporate offices in Mississauga and Markham, Ontario. Katz Group also owns Minnetonka, Minn.-based Snyder's/Drug Emporium in the United States.

All those banners will continue to operate "as distinct entities," said Latowsky, but will be "intrinsically connected by their commitment first."

In an interview Feb. 18, Latowsky said the company has made a "tremendous" investment in new hardware and software to create a common operating platform across its operating divisions and back-end support functions. "By the end of March, he told Drug Store News, "we will have converted all 185 of our Pharma Plus stores to new hardware and new pharmacy applications software. By the end of this year, we will have completed the balance of all Rexall and Herbies/Payless stores."

Nevertheless, said Latowsky, "We're maintaining the autonomy of each of the operating divisions. But in terms of infrastructure and common services, we've eliminated duplication."

For instance, he said, "If we had two category managers buying confectionery, we now have one who negotiates the confectionery purchases for the entire organization. We do have specific people who represent the merchandising and advertising for the specific banners, but there is now one person negotiating with the supplier. So we've moved to centralized purchasing."

This year, said Latowsky, further integration of marketing and merchandising across the company's diverse store network will go forward. "We're not going to have a single logo, but we will offer a common proposition in marketing and he said, promising some "breakthrough and gutsy" moves to capture market share.

"The beauty of our business is multiple formats. That gives us the ability to meet multiple needs of developers and of markets," he said. "And each will have enough critical mass that consumer awareness will not be an issue.

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