CASE STUDY: DAY LEWIS
“WE’VE BENEFITTED HUGELY FROM THE RELATIONSHIP AND THE ADVICE THAT’S BEEN GIVEN.”
Bhavesh Yagnik, Head of Property, Day Lewis
The Day Lewis Group, a national award-winning community pharmacy retailer turning over £400m p.a., was founded in 1975 by Kirit Patel MBE and his brother JC Patel in 1975. It’s now under the leadership of Kirit’s children Jay, Rupa and Sam, making it a family-owned entity in its truest sense.
With a mission to help people in the community to “stay healthy and feel better”, Day Lewis Pharmacy’s one of the largest independent retail pharmacy chains in Europe, consisting of over 300 pharmacies in the UK.
With patients being the beating heart of the business, Day Lewis pharmacies can be found in local communities, high streets and health centres. They even have the management rights to the pharmacy concession in Harrods, the world-famous department store in Knightsbridge, London.
As well as having a strong retail pharmacy base, the Group includes a central distribution division, with warehouses equipped with Knapp automation enabling it to supply over 4,500 pharmaceutical products to its retail pharmacies in the UK.
And its future ambition? To grow through acquisition whilst still maintaining its independence and family-feel culture.
Bhavesh Yagnik, Head of Property at Day Lewis looks after a small team who run the day-to-day of the business properties; from repairs, maintenance and facilities management, right through to the professional work alongside our Property Advisory team on rent reviews, lease renewals, acquisitions and disposals.
In his three and a half years to date with the company, Bhavesh says the team’s gone from strength to strength. They’ve successfully centralised all data in their property portfolio in order to become more streamlined and maximise the value of their property assets.
But there have been challenges to overcome too.
KEEPING PROPERTY COSTS UNDER CONTROL
Day Lewis Group’s biggest challenge in recent times has been keeping property costs under control.
“Whilst the pandemic affected retail property in general, rents haven’t fallen substantially, despite what the media tell us,” says Bhavesh.
“Industrial rents have increased 2-3 times where they were 5 years ago. There’s marginal savings that have been made, but on the other hand we’re seeing additional costs that weren’t predicted,” he adds.
And Covid was something no one could have ever predicted!
Pharmacies of course were one of the establishments that needed to remain operational throughout the pandemic. Day Lewis needed to act fast to add measures into all of its nationwide pharmacies, ensuring they were appropriately staffed and that everyone was kept safe; implementing Covid cleans, one-in, one-out, two people in a store at any one time, as well as getting to grips with working from home for its office-based workforce.
The business came together to work through the challenges and came out the other side with solutions to keep pharmacy doors open.
Bhavesh went on to say, “It was tiring for everyone involved, especially those on the front line within the pharmacies. With that came our strength to open vaccination areas, strategically located throughout the UK to help the NHS and the government, and ease pressures across the board.
“We also sourced additional properties to support our efforts, including church halls, community centres, as well as buildings not being utilised like sports venues. We had a duty of care to ensure people got their vaccinations and it was a huge team effort.
“We’re talking 100,000+ Covid injections delivered by Day Lewis.
“In selecting suitable property, we needed to adhere to NHS guidelines and complete the necessary documentation. It was a strict process that had to be followed, and to get the right equipment, setting up waiting areas; it was a huge undertaking. When entering a vaccination centre, all you see is the queue, you get your vaccination and you leave – you don’t really see any of the infrastructure or what’s going on behind the scenes. All in all, it was a challenge of epic proportions but a huge achievement all the same for Day Lewis.”
IN THE BUSINESS OF FAMILY & RELATIONSHIPS
“Though we’ve been working with the team for two and a half years, our association goes way back to 2005. I was actually a Uni graduate with TC SEM’s Partner, Tom Dymond! When I moved into my current role at Day Lewis there was an opportunity to work together again. Tom and the Property team at TC Group are now completely involved in the wider strategic portfolio, including warehousing and sub-letting of unoccupied property,” Bhavesh explains.
Day Lewis has a number of professional services advisors on its panel. In choosing those advisors, they make sure they’re aligned with the principles of the Group and offer both great service and value for money.
“The business has been family owned for over 45 years and it’s a relationship business. The family have put a lot of effort into nurturing those relationships during that time, and this is something we’re continuing to do moving forward.”
“It started off as ‘can you support us on a one-off project’, but it’s grown to become a portfolio-wide role for TC Group – we know the team’s on hand and their advice is strong. On top of that, the coverage across the UK’s very similar to that of Day Lewis. Like us, they’re a national operator, working with a number of clients in the property retail space – the synergies just work.
“We’re currently working with them to agree rents at the right level, making sure the lease strategy and structure’s what we want, and we’re acquiring in the right locations. Day Lewis’s property team’s fairly small, but bolstered by TC Group’s ‘pockets of people’ up and down the country means we get the support we need for all our region-specific property projects.
“We’ve benefitted hugely from the relationship and the advice that’s been given.”
Beyond supporting the Day Lewis property team with the impacts of Covid-19, we’ve undertaken numerous acquisitions of sites, including investments for the pension trust and a new 90,000sq ft warehouse deal for their industry leading EM Pharma division – a business that supplies the majority of UK eye drops and contact lens solutions.
Tom Dymond, Partner at TC SEM said, “We’re proud of the fact we’ve become Day Lewis’s go to Surveyors, and particularly proud that we’ve been involved in the growth of their EM Pharma subsidiary. We managed to negotiate a fantastic deal for them and in doing so, we’re saving them money and driving efficiencies.”
Disposals, lease renewals and rent reviews are aplenty too.
We’ve have managed settlement of lease renewals and rent reviews on various Day Lewis pharmacy sites, as well as the sales and letting of surplus properties across the UK. Then there’s the ‘tricky’ projects.
Bhavesh says, “Our sector’s certainly not run of the mill and we have to consider new property acquisitions on a case-by-case basis. As a property team, things we didn’t know about, or plan for, can and do crop up from time to time, so we have to work as a team with our external professional advisors and business development team to find a solution. If a specific pharmacy’s not performing the way we thought, we need to adapt and make changes.”
A TRUE SENSE OF PRIDE
“We’re proud of the fact we’ve become Day Lewis’s go to Surveyors, and particularly proud that we’ve been involved in the growth of their EM Pharma subsidiary. We managed to negotiate a fantastic deal for them and in doing so, we’re saving them money and driving efficiencies.”
Tom Dymond, Partner – TC SEM
“AS A GROWING PHARMACEUTICAL ORGANISATION, WE’RE STILL ACQUIRING NEW PROPERTIES STRATEGICALLY AND DEVELOPING THE WHOLESALE AND PRODUCT MANUFACTURING BUSINESS. TC GROUP ARE HELPING US WITH THIS AND MORE, AND WE LOOK FORWARD TO CONTINUE WORKING WITH THE TEAM LONG INTO THE FUTURE.”
Bhavesh Yagnik, Head of Property, Day Lewis