Japan's Lawson Plans To Buy A U.S. Or European Drug Chain, Then Tap Its Expertise

Japan's second-largest convenience-store chain wants to get more deeply into Japanese health care—and plans to buy a U.S. or European pharmacy chain to do it, Bloomberg reported.

Lawson, which has about 11,000 C-stores in Japan, hasn't yet started talking with any potential acquisition targets. But the idea is to tap an existing chain's expertise. "We see more business opportunity if we can absorb the know-how of U.S. or European drug stores and put it into practice in Japan and China," said Lawson CEO Takeshi Niinami.

Lawson already owns 5 percent of Japanese drugstore chain Qol, and about 80 of Lawson's own outlets sell drugs. But Niinami said he expects health care to be deregulated if Prime Minister Shinzo Abe's party wins parliamentary elections on July 21, as expected. That, combined with Japan's aging population, means health care and retail pharmacy will be a growth business.

There may be easier ways for Lawson to gain expertise from chains with Western-style drugstore techniques, such as partnering with a big chain. But Niinami may be in a hurry to gain deep knowledge quickly.

The retailer's plan is to open one-stop shops that will cater to health-conscious consumers. The inventory might include prescription and over-the-counter drugs, nutritional supplements and health food or organic food.

That could make U.S. drug chains a mediocre fit for Lawson's plans. Most U.S. drugstores are fine on the pharmacy and supplements side, but aren't strong in their healthy-food offerings. On the other hand, heath-care related items other than drugs and supplements, such as health-care related hardware, are a staple of U.S. drugstores.

For more:

- See this Bloomberg story

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