The demise of Lloyds pharmacy was less of a sudden collapse, and more of a controlled demolition. The pharmaceuticals company had been quietly removing itself from the scene since 2017, silently closing stores and selling assets. This was in order to change business direction. For instance, LloydsDirect prescription delivery service has actually grown by 55% in the background. However, had it played its cards differently, there would still be a Lloyds on the high street. Here’s what we can learn.
Innovate Or Fade Away
Rival chain Boots maintains its powerful presence, effectively winning the battle of the high street. It’s CEO, Seb James, maintains that high street stores need to adapt and innovate in order to survive. In particular, he argues that they should re-evaluate their role in the local and national community. In the case of Boots, he wants the government to change the rules on which services pharmacies can offer, thus easing the pressure on the NHS, while boosting the value of the company.
Adaptation and innovation is only possible with solid financial grounding. Professional accountants, one of the main services of whom is to offer strategic planning advice, are excellent allies for this.
Be Careful With Your Contracts
Lloyds may have thought that it had safely reorganised itself into an online-only service, but it has run into some fairly significant problems. For instance, Sainsbury’s has launched a major legal battle relating to the contracts that its staff held with the in-store pharmacies, resulting in hefty redundancy claims for 1185 employees. This is likely to be just the tip of the iceberg, and is something that Lloyds apparently did not predict.
Employment contracts can suddenly become a minefield in cases where companies want to radically alter their organisational strategy. It is always best to work with an experienced accountant when creating any legal documents.
Be Bold And Plan Ahead
Although ‘going into administration’ sounds like the death knell for an organisation, Lloyds has managed to retain a surprising number of its assets. The decision to abandon the high street in favour of digital-only services could either be seen as a stroke of genius, a catastrophe, or a bit of both. If anything, it was certainly a risky move that has plunged the company into the highly volatile and uncertain world of digital pharmacies without the support of its long-established bricks-and-mortar presence.
Time will tell whether this astonishing organisational strategy was worthwhile, especially if Seb James achieves his goal of turning high street pharmacies into the nexus of the community, leaving Lloyds out in the cold.
The Takeaway
Lloyds bumped into a funding problem and played a very wild card, resulting in the loss of some of its most valuable assets. Although this is an admirable case of planning ahead, it also introduces a host of organisational vulnerabilities. Bold moves can have excellent results, but only when planned with absolute strategic precision. This is something that experienced accountants are experts at supporting.
Find Out More
If you are considering any big decisions, or are facing the risk of administration, it is crucial to consult a professional accounting support network. This is where Vanilla Accounting can help. For more information, please contact one of our experienced team today by clicking here.
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