Farmacias El Amal, was a regional pharmacy chain operating throughout Puerto Rico. At its peak, it operated more than 60 pharmacies across Puerto Rico. The chain was privately held and was founded in 1973. Its largest competitors were Walgreens, Kmart and Walmart.
History
Origins Saleh Yassin came to Puerto Rico from Jerusalem at age 17 to attend Inter American University. He worked his way through college as a self-employed door-to-door salesman. He graduated with honors with a bachelor's degree in economics and business administration. He obtained a master's degree in economics and finance from the University of Rhode Island in 1970, and then studied toward a doctorate in economics and industrial organization at Vanderbilt University. In 1973, he took over Super Farmacia El Amal Inc., a small drugstore in Río Piedras that had less than $200,000 in annual sales and was nearly bankrupt. Decades later, annual sales at Farmacias El Amal surpassed $200 million. Yassin, who was a three time Caribbean Business Top 10 Business Leader, said Puerto Rico is his adopted home and stresses that El Amal was a 100% Puerto Rican company. In 1978, he founded a wholesale operation named COD Drugs, which in 1995 became the purchasing arm of Farmacias El Amal. Yassin had also acquired pharmaceutical manufacturer Sein Mendez Laboratories and entered into various successful real estate ventures. Farmacias El Amal would continue to successfully slowly expand during the 70s and 80s, with new store openings such as in Carolina and San Juan.
On December 8, 1978, Farmacias El Amal would open a store at the Plaza del Carmen Mall in Caguas.
Expanding: 1990s–2000s In 1995, Farmacias El Amal would purchase another local drugstore chain on the island, Farmacias Moscoso.
On April 26, 1999, it was reported that 1998 had marked many challenges and changes for the then 50 unit Farmacias El Amal, but, as the year came to a close, Puerto Rico's largest drug store chain posted double digit increases for the year. Sales performance, which was right on target, got some help from promotional and public relations efforts related to 1998 being Farmacias El Amal's 25th anniversary. The promotions included outdoor concerts and commercials. "We're still the new kid on the block in terms of recognition in many areas," said Saleh Yassin, Farmacias El Amal's president and chief executive. “Until three years ago we were a small chain, then we took over the largest chain, but our challenge is that we retained the name of the smaller chain." Despite Farmacias El Amal digesting the Moscoso drug store business it acquired, stiff competition abounded on the small island. Walgreens had 46 locations, Kmart had 26, Wal-Mart had nine, and there were still 850 independent drug stores. Yassin compared the competition to a battleground. In addition to competition, Farmacias had Hurricane Mitch to weather. The chain lost to the hurricane one store which it had since rebuilt and stores operated on emergency power and lights for 40 days. But the hurricane didn't affect overall annual sales, which rose 29 percent to $160 million from 1997. Also contributing to sales was the addition of three new units during the last half of 1998, bringing the chain's total store count to 50. Average store size had been boosted up to 7,500 square feet in 1998 from 6,800 square feet in 1997, as Farmacias remodeled four stores to the chain's new 12,000 square foot prototype. Yassin's first focus for 1999 was getting seven new stores up and operating before the end of the year. Five of the new stores would be 12,000 square feet, one will run 14,000 square feet and one will be nearly 16,000 square feet. Roughly $64 million, or 40 percent of the chain's sales, were pharmacy sales, 65 percent of which were third party. Yassin predicted that number to reach 80 percent by the end of 1999.
On April 24, 2000, it was reported that despite Puerto Rico's difficult competitive climate, Farmacias El Amal ended 1999 with a 12.5 percent sales gain and a 10 percent advance in same store sales. The chain also added five new stores and remodeled five more. The increase in sales to $180 million was far more difficult in 1999 than in previous years because of competitors such as Kmart, which aggressively added drug store style departments in 16 existing units. Farmacias spent $2 million in 1999 to install a new data mining and data warehousing system designed to improve category management. Also in 1999, general merchandise and grocery products accounted for 25 percent of sales, up from the previous year. In addition, over the counter products accounted for 15 percent of sales, health and beauty care products for 10 percent and home health care for 10 percent. In 2000, some of these categories would receive new planograms based on scan sales data from the prior year. Other changes in 2000 included the addition of four drive throughs, which Yassin noted was spurred by Walgreens' aggressive addition of drive throughs to its stores. Farmacias planned to open five stores this year, and all but one were slated to get drive throughs.
On August 31, 2000, it was reported that Farmacias El Amal was forging ahead with its aggressive expansion plans, as it planned to invest about $13 million to open new sites during the next couple of years. "We have contracts signed for 13 new drugstore locations, but opening dates sometimes depend on the completion of shopping centers," Saleh Yassin president and CEO of El Amal announced. El Amal locations to open before year's end included Rio Grande, Las Piedras, Fajardo, and Carolina. "Next year, we are looking to open four to five more," he continued, adding that each new store required an investment of about $1 million. Meanwhile, similar to other local retailers, Yassin commented sales had been slower compared to 1999. "There are many factors affecting sales including high electricity and gasoline prices and the lack of Hurricane Georges' money injection," he said. As far as rumors concerning the sale of El Amal to Eckerd, which reportedly intended to enter the Puerto Rico market, "The rumor denied itself. I always said it wasn't true," he said. "Our plans are to continue opening stores." Eckerd, a wholly owned subsidiary of JCPenney, halted its plans to enter the local market earlier in the year. JCPenney announced plans to close some 45 department stores and 300 Eckerd drugstores nationwide as part of the company's restructuring initiatives.
On April 23, 2001, it was reported that in the words of Farmacias El Amal president and chief executive Saleh Yassin, Puerto Rico had become a "battleground" as competitors such as Walgreens, Kmart and Wal-Mart continuing to open pharmacies there. Despite Puerto Rico's highly competitive marketplace, Farmacias El Amal ended 2000 with an 8 percent sales increase and one store addition. For 2001, the chain has even bigger plans to set it apart from the competition. This year, the drug chain planned to open four more stores, bringing the total number of locations to 59 by years end. And because convenience is high, if not No. 1, on consumers' wish lists, Yassin said three of the new stores would be free standing units with drive through pharmacies. “Our new sites are 90 percent freestanding with drive throughs," said Yassin. "We have to be up to speed with what goes on in the market." Yassin said Farmacias also would add one hour photo labs in all stores to help increase traffic. In addition, the chain would install automatic teller machines, which would allow consumers to pay utility bills electronically or access the internet. And, after putting its e-commerce initiatives on hold, the drug chain is forged ahead and planned that month to launch its e-commerce Web site. The site would offer about 10,000 SKUs and online prescription refills. While the site would be available only in Spanish during the first few months, Yassin said an English version should be initiated by June of that year. The site would also offer second day delivery on goods, or consumers could opt to pick up ordered items at the stores. To further differentiate itself, Farmacias was launching a $300,000 marketing campaign, with the slogan, "Lo nuestro es farmacias," or "Pharmacy is our stuff, said Yassin, who noted that pharmacy accounted for 44 percent of sales.
On March 6, 2003, Farmacias El Amal President & CEO Saleh Yassin announced that the company would invest more than $8 million to open six new stores before Mother's Day. The locally owned pharmacy chain was also celebrating its 30th anniversary at the time. "We already have the Certificates of Need & Convenience [CNC] required by the Health Department to open the pharmacies and have secured the locations," said Yassin. "All we are waiting for now are the use permits from the Regulations & Permits Administration [ARPE by its Spanish acronym]." The new stores would be in Bayamón, Caguas, Encantada (Trujillo Alto), Guayama, Plaza Las Américas, and Prime Retail in Barceloneta. Yassin also noted that four of the six new stores would be in freestanding locations, which he said "usually cost more than $2 million to open. This time the only stores that won't be freestanding are those in Encantada and Plaza Las Américas." Although the chain continued to expand, Yassin said he doesn't think its comparable store sales will increase much. "I really don't see the economy improving, when you match inflation with the increase in sales, you notice that we remain the same as last year," he said.
On June 5, 2003, it was reported that El Amal had proven a fierce competitor to Walgreens, the pharmacy chain with the highest sales in the nation, according to Hoover's Online. Walgreens might’ve been the largest pharmacy chain on the island, but El Amal was a close second; and would open its 61st store that week. With an estimated 2001 revenue of $190 million, El Amal was the 26th-largest locally owned company and the largest locally owned pharmacy chain in Caribbean Business' list of Top 300 locally owned companies. "In 2002 we surpassed $200 million in sales revenue," said Saleh Yassin, president & CEO of Farmacias El Amal. "You can't be scared of competition; you just have to compete. I have seen many local retailers instantly give up all hope when a large competitor enters the local market. If you give up so easily, then there is no hope, but if you strive to do well, you will give yourself the opportunity to survive and excel?" El Amal had approximately 1,050 employees and 55 stores in 2001. Before the end of this week, the chain would grow to 1,500 employees and 61 stores.
On August 14, 2003, after inaugurating five stores in June of that year, Farmacias El Amal was opening another store in San Patricio. The company said the new store in the former Telefónica building required an investment of more than $7 million. It would have a drive-thru window and a parking lot with space for 165 vehicles. El Amal now owned the entire building, but the pharmacy will occupy only the third floor; the other space would be leased. Farmacias El Amal at the time was Puerto Rico's largest locally owned pharmacy chain, according to the 2003 Caribbean Business "Book of Lists."
On March 23, 2006, it was reported that locally owned pharmacy chain El Amal planned to open three more pharmacies by the end of 2007's first quarter, said President Saleh Yassin, adding the investment should reach $4.5 million. Yassin expected El Amal pharmacies to open in Manatí, Morovis and Adjuntas, all averaging 13,000 square feet in size. The Manatí store was expected to open by the end of that year. The Morovis and Adjuntas stores were expected to be ready during the first quarter of 2007. "These are all locations we have leased, not bought, so the investment is for remodeling the space and to purchase equipment and inventory," the executive explained. Some 90 new jobs were to be created when these stores open.