How Clicks Became SA’s Leading Health, Beauty & Wellness Retailer

In order for us to understand how Clicks became South Africa’s leading health, beauty and wellness retailer and the largest retail pharmacy chain, let’s take a closer look at the life of its founder, Jack Goldin.

By the 1960s, he had already built a successful career in retailing including the ownership of four small Cape Town based stores called Pick and Pay which he eventually sold to Raymond Ackerman in 1967 for R620 000. Ackerman then went on to build Pick and Pay into one of South Africa’s leading food, clothing and general merchandise retail group.

The sale Pick and Pay enabled Goldin to pursue his own retailing dream of establishing an American-style drug store, featuring health and beauty items, over-the-counter medicines, and general merchandise, as well as a dispensing pharmacy, such as found in the United States. In 1968, Goldin opened his first store, called Clicks, in Cape Town.

Goldin’s dream was thwarted, however, due to South African legislation that severely restricted the pharmacy market in South Africa. In particular, the legislation disallowed corporate ownership of retail dispensing pharmacies, helping to protect the independence of the country’s pharmacists.

Undaunted, Goldin continued to build the Clicks format of a drugstore without the actual drugs into a nationally operating chain. By 1971, Goldin had opened its first store outside of the Western Cape region. At the end of that decade, Goldin’s company, which went public as Clicks Stores in 1979, operated 31 stores for total sales of more than R50 million. The listing on the Johannesburg Stock Exchange enabled Goldin to accelerate the growth of his company, and by the middle of the 1980s, Clicks had topped 50 stores.

The company had also launched its expansion into other retail markets. In 1984, the company acquired the Diskom chain of stores. This company, which operated 11 stores, specialized in providing health and beauty products to lower and lower-middle income consumers, targeting especially the ethnic markets.

Under Clicks, the chain was rebranded as Discom, then expanded across South Africa before entering neighboring markets in southern Africa. By the 2000s, the Discom chain itself had grown to nearly 180 stores.

Clicks underwent a series of changes of ownership in the late 1980s and into the 1990s.

That process started when the company brought in Trevor Honeysett as managing director in 1987. Honeysett was to remain at the head of the company into the middle of the first decade of the 2000s. Goldin continued as company chairman following Honeysett’s arrival, and remained chairman even after he sold control of Clicks to the Score Food Group in 1988.

In 1991, however, Goldin resigned the chairmanship role and emigrated to Australia. There he helped co-found the pharmacy chain, Priceline, in 1982 alongside, helping to reshape it to mirror the Clicks format.

Under Honeysett, Clicks stepped up its expansion, growing rapidly to more than 150 stores by the beginning of the 1990s. By 1991, the company’s annual sales had topped R500 million, and the group was a leader in its retail category. Building on this position, the company sought out a new market at the beginning of the decade.

In 1992, Clicks acquired Musica, then leading retail music store chain in South Africa. That purchase not only helped boost the company’s sales to 330 stores by 1994, it also enabled the group to post revenues of more than R1 billion that year.

By then, Clicks had found itself under new ownership, when the Premier Group acquired control of the company in 1992. Yet that relationship did not last long. In 1995, Clicks was sold to Malbak, which set up a holding company for the acquisition called New Clicks Holdings.

The same year saw the introduction of Clicks ClubCard which to this day remains one of the most generous retail loyalty programmes in South Africa, delivering a 2% discount on purchases and the opportunity to earn more cashback through double points programmes. Partners include Engen, Discovery and Netflorist amongst many others.

Malbak itself was a subsidiary of the country’s insurance giant Sanlam, and New Clicks’ existence under it proved short-lived, as the company launched an “unbundling” exercise into the second half of the decade.

This restructuring refocused Malbak as a packaging company and paving the way for its merger with rival, Nampak. As part of the unbundling effort, New Clicks was relisted on the Johannesburg Stock Exchange in 1996, while remaining controlled by Malbak. Then, in 1997, Malbak sold its shareholding in New Clicks. The company then became an independent company for the first time in nearly a decade.

New Clicks lost no time in returning to its own expansion drive. In 1997, the company bought another music retailer, Compact Disc Wherehouse. New Clicks then expanded the CD Wherehouse format, which featured a more extensive catalog than Musica, including a strong import titles offering from a single store into a growing chain, with four stores including two in Johannesburg, and one each in Durban and Cape Town.

The addition of CD Wherehouse helped New Clicks become a dominant player in the South African music retail sector, accounting for some 40 percent of the total CD market.

The company also sought further expansion outside of the South African market. Australia became the company’s new foreign target, and in 1998, New Clicks bought out the Priceline drugstore chain which as mentioned was co-founded by Jack Goldin. By then, Price-line had grown into a chain of 70+ stores. The acquisition helped boost New Clicks’ total holdings to nearly 540 stores for the year, generating revenues of more than R2 billion.

New Clicks continued its acquisition drive into the dawn of the 21st century. The company acquired a 30 percent stake in Link Investment Trust in 1999, which oversaw more than 300 drugstores in South Africa. By the middle of the next decade, New Clicks had gained control of Link Investment, raising its share to 56 percent.

The company also entered KZN in 1999, buying the Modisons retail group, which operated a discount format similar to Discom.

The Modisons stores were then rebranded under the Discom format. Meanwhile, the company added a more upscale retail format to its South African operations, acquiring the South African franchise rights for The Body Shop retail chain in 2001, a UK brand famous for creating a market niche for naturally inspired toiletry and beauty products.

The deal was strategically important for the group’s beauty business, in line with its stated intent to specialise further within the core categories of health, home and beauty.

The Body Shop was started by entrepreneur Anita Roddick in 1976. It rapidly evolved from one small shop in Brighton, England, with only around 25 hand-mixed products to a worldwide network of shops selling a range of over 1000 products.

The company currently operates in more 70 countries with 3000 outlets while employing 10 000 people who serve 30 million customers.

The company’s representatives undertook an ethical and social audit of New Clicks in line with its recognised principles and decided that the direct franchise route was the most appropriate way of developing the Body Shop in South Africa and also in the African continent.

New Clicks also entered into a strategic partnership with COSi, a South African company which operated The Body Shop’s outsourced manufacturing facility in the UK, whereby COSi had a 25% stake in The Body Shop South Africa.

As of 2023, there are 56 body shop outlets in South Africa and more set to launch in the coming years.

By then, the company had launched a new strategy to build its holdings in Australia, targeting growth into one of that country’s major health, beauty, and lifestyle products companies.

In 2000, the company added the home furnishings franchise group, House, which operated through 66 retail stores.

This was followed by the purchase of the 94-store hair care franchise network Price Attack in 2002.

Meanwhile, pressure had been building on the South African government to reform legislation covering the pharmacy market in order to allow corporate ownership of pharmacies.

In preparation for this eventuality, New Clicks extended its operations into the wholesale sector, acquiring United Pharmaceutical Distributors for R281 million in 2002. The purchase provided the company with access to most of the country’s independent pharmacies and was seen as a step toward building the company’s own network of franchised pharmacies.

UPD has since become South Africa’s leading full-line wholesaler and supplies pharmacies, hospitals, dispensing doctors, health services and affiliated healthcare channels.

The business services over 1 350 independent pharmacies which account for 14.5% of turnover. UPD is also the license holder of the Link pharmacy brand which has independent, owner-managed pharmacy stores in South Africa and neighbouring African territories.

UPD owns distribution centres located in Gauteng, Cape Town, Durban, Bloemfontein and Port Elizabeth. All its distribution centres are iso nine thousand 1 certified.

In the mid-1990s Clicks was the darling of the JSE, the share rising consistently from R6.08 in 1997 to R9.50 in 1999 and R12.85 in 2000. A year later things started to fall apart at the company, and the share derated, receding to R7.15 in 2003.

It was clear to its then biggest shareholder, Coronation Fund Managers, that Clicks had lost its way. It was no longer the pioneering company that had successfully launched SA’s first loyalty card. By 2004 Clicks stores looked tired, its product selection was dull, its costs were too high and the business was overly complicated. What had gone wrong?

It was a case of the right vision at the wrong time. In the late 1990s Honeysett focused on a new vision for Clicks which was to become SA’s largest pharmacy group. But to do this he had to win the right for companies to legally own pharmacies. He became mired in legal battles with government and lost focus.

At last, in 2003, the South African government passed new legislation allowing for the corporate ownership of dispensing pharmacies.

This brought to a close an epic seven-year battle which went all the way to the constitutional court. It was a victory for Honeysett, who was among the first to take up arms when the regulations were first published. His lobbying however cost him his career, and nearly the company he ran.

Following the ruling, Clicks immediately began plans to convert part of its Clicks store chain into a new expanded format, called Clicks Pharmacy, announcing plans to spend as much as R100 million over the next four years to convert its stores. The company also boosted its position in the market, buying rival pharmacy group Purchase Milton & Associates in 2003. The first Clicks Pharmacy opened for business in Cape Town in 2004.

The prospects of new growth in South Africa led New Clicks to decide to exit its Australian holdings that year. New Clicks Australia was then sold in a management buyout, raising R240 million for the South African company. While the sale cut New Clicks’ store portfolio in half, dropping its total back to just 680 stores, the addition of pharmaceutical sales enabled the company to post continued revenue growth; by the end of its 2004 year, the company’s sales topped R8 billion.

With the rollout of the Clicks Pharmacy chain well underway through 2005, the company’s sales jumped again, topping R10 billion at the end of its 2006 fiscal year.

Part of that growth was attributed to the arrival of former Boots executive David Kneale, who took over as the company’s managing director following Honeysett’s retirement who had been at the helm for 18 years. Kneale was recognised as one of the UK’s top health and beauty specialists, having been involved in practically every part of the business.

This included setting up Boots stores in far-flung countries like Thailand and Japan and masterminding the launch of Boots Number 7 cosmetic range, the relaunch of the Number 17 range and the company’s move into more atypical products, like the Natural Collection.

Kneale set out to streamline parts of the group’s operations, including establishing a more efficient, centralized distribution system for the company.

New Clicks moved to rationalize its retail music operations in 2006. At the same time, faced with pressure from the growing popularity of Internet-based music sales, as well as the rising toll of illegal music downloads, the company moved to create a new “retail entertainment” format.

As part of this effort, the company converted the former CD Wherehouse stores into the new Musica Megastore format. The new format added an expanded selection of DVDs, as well as gaming and game console–oriented merchandise.

Of course turning Clicks, the retailer, around was the priority project. The Clicks business model works on the fact that seven out of 10 people will buy goods in the front shop when they collect a script. If they do, the theory is that the in-store front shop will generate roughly 73% of the business’s revenue. At a community pharmacy this ratio is the reverse.

By the beginning of 2007, New Clicks oversaw a growing empire targeting what the company called the retail “lifecare” market, and had emerged as one of southern Africa’s leading retail groups.

The management also embarked on an ambitious programme of redesigning stores, specifically to attract the female shopper. Like all change, some of it was nuts and bolts stuff and some designed to target emotion.

Another objective was to simplify the group structure. According to Kneale, If you couldn’t detail your company’s structure and strategy on half a page, it was too complex.

Discom, the group’s low-end health and beauty chain, was first under the hammer. Having realized they were perpetuating the segregation of the past, it was decided that Clicks would be the pre-eminent health and beauty brand for all South Africans.

So Discom was sold to Edcon for R369 million. But first the group absorbed some of Discom’s expertise in ethnic hair care. Today, Clicks has a significant percentage of the ethnic hair-care market.

However by 2012, the now defunct Edcon had ran down the Discom brand to the ground, the holding exited its Discom stores brand by converting them into its then growing 2 brands, Edgars Active and Legit.

In late 2008, the group acquired a 60% stake in leading courier pharmacy business, Direct Medicines, for a cash payment of 13.2 million rands.

The acquisition enabled Clicks to broaden its coverage in the retail pharmacy market and accelerate its national pharmacy Presence.

Direct Medicines was established in Johannesburg in 1994 as part of Afrox Healthcare. Following a management buyout from Life Healthcare in 2005 the business was independently owned and managed.

After the acquisition, the business was rebranded to Clicks Direct Medicines and has been operating efficiently ever since.

The following year, New Clicks Holdings changed the name of the company to Clicks Group Limited and transferred its listing to the Food and Drug Retailers sector on the JSE.

As you saw before, the name of the Clicks Group Limited was changed to New Clicks Holdings when the business was restructured ahead of the re-listing in March 1996.

Back then, the term, ‘New’, was used to reflect the change in the group structure and distinguish the old business from the new one. However, after more than 13 years, the term ‘New’ was no longer relevant.

The Johannesburg Stock Exchange approved the change and the abbreviated name ‘Clicks’ was used with the share code, CLS.

In 5 years, Kneale had achieved one of the most remarkable turnarounds in corporate SA. In that time the group had increased its return on equity from 14.5% to 50.8%, a 29% compound annual growth rate.

The 2010 decade saw the group opening more stores, modernizing its distribution system, increasing wearhouse space and also clinching strategic partnerships with international brands, as well as local ones.

From 2012 to 2017, the group launched Sorbet, GNC and Claire’s products in its stores across the country through exclusive agreements.

On top of that, the group also secured a long-term agreement that saw healthcare group Netcare outsource its 37 retail pharmacies in Medicross medical and dental clinics and 51 Netcare hospital retail front shop operations to Clicks.

The company also ramped up its ecommerce offering during this period, it has since become the largest and fastest-growing Clicks store with the largest range of products, including ranges that can only be found online and allowing for home delivery or click-and-collect from any Clicks store nationwide, with smart, high-tech pick-up boxes now available in-store.

The Clicks app has also been downloaded by over 2.5 million customers, allowing ClubCard members to check their points, submit a pharmacy script or locate their closest Clicks store, while also accessing personalised ClubCard deals, Tap ‘n Go functionality and QR payments for a contactless experience.

By the time David Kneale bowed out in 2018 as CEO, the group’s market capitalisation had passed the R50 billion mark in its 50th birthday year and the company was included in the JSE Top 40 Index for the first time.

Under the guidance of Bertina Engelbrecht, we also saw the company making more acquisitions, launching in-house projects, as well as saying goodbye to one of its iconic brand.

In January 2021, Clicks decided to close its Musica entertainment business after 29 years of operation due to the shift to digital consumption of music, movies and games, exacerbated by the Covid-19 pandemic.

For several years, Musica had been operating in a declining market owing to the structural shift globally to the digital consumption of music, movies and games from the traditional physical format

The inevitable demise of the brand was accelerated by the COVID-19 pandemic which resulted in the rapid decline in foot traffic in destination malls where Musica stores were typically located.

The Musica staff were absorbed into the group’s expanding health and beauty store network.

The group made 3 strategic acquisitions to strengthen its position as the top health and beauty retailer:

First it was Pick N Pay’s retail pharmacy business which saw 25 in-store pharmacies rebranded to Clicks.

This was followed by a R105 million purchase of Sorbet, a beauty therapy hub with over 200 Stores countrywide, operating under various store formats.

More interestingly, Clicks also acquired its first 24-hour pharmacy called M-Kem, a long-established 24-hour pharmacy based in Bellville. So far there are no plans of rebranding M-Kem but let’s give it time to see if what we’re all thinking will happen or not.

Although Clicks core business is health and beauty, the baby category had been a strategic growth area for Clicks for a number of years, helping the group attract new customers, hence it came as no surprise when the retailer launched its first ever standalone Clicks Baby store in Gateway Theatre of Shopping in KZN, more baby stores were later opened in major malls across the country.

These stores serve as more of a showroom for larger items for babies, with most sales expected to take place online. Clicks usually sells hardware baby products such as prams, car seats, and cots on its online store, but the addition of standalone baby stores helps it offer these in the dedicated baby store.

With so much choice in the realm of retail, convenience has become king, with difference-driven brands raking in the rewards. Clicks is a prime example, known for its 3-for-2 promotions, it offers customers in the middle to upper income market exceptional value for money in convenient and appealing formats.

The brand has certainly kept up with the times, however its, ‘Pay Less’, tagline hasn’t changed in over 50 years. It is just as relevant today as it was when Jack Goldin opened the first Clicks store in St George’s Street, Cape Town in 1968.

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