Haas School of Business

Prescription for Growth

Taking an Israeli chain over the Great Wall

Lior Reitblatt, MBA 88
CEO, Super-Pharm, Tel Aviv




Lior Reitblatt has shown the determination of David in his two-decade campaign to expand Israel's largest drugstore chain.

While doubling sales of Super-Pharm every five years, Reitblatt has taken on such goliath challenges as managing during war and navigating government hurdles in China.

Reitblatt rose to CEO at Super-Pharm five years after joining the company directly after earning his Berkeley MBA. A family-oriented culture attracted him to Super-Pharm, which unlike U.S. drugstores draws the majority of its sales from high-end cosmetics and perfume. The company, owned by a Canadian family, is sometimes called the "Nordstrom of Israel."

"It's a $1.2 billion business, but with the compassion, celebration, and happiness of a family," Reitblatt says.

Reitblatt has fostered that culture while confronting unique challenges in Israel, where Super-Pharm has 182 franchise stores and is the nation's largest employer of Arabs. One major challenge came during the Second Lebanon War in 2006.

"Rockets were falling on the cities and the stores. Everyone was running to the safe room, including customers," Reitblatt recalls. "Jewish customers started to curse because Arabs were in the room. And then Jewish employees protected the Arab employees. It was a very sensitive situation."

At the end of the war Super-Pharm showcased this camaraderie at its annual convention through a video with interviews of Arab and Jewish employees. "On one hand, we take out politics from the discussion," Reitblatt says. "On the other hand, we sometimes have to deal with issues that result from politics, like this war, and not let them get between us."

As if such challenges at home weren't enough, Reitblatt has been leading Super-Pharm through expansion abroad.

Most European countries allow a single company to own only one to three pharmacies. But Reitblatt and his team found Poland offered a large enough customer base--roughly 40 million--to justify the cost of jumping regulatory hurdles there. After overcoming obstacles to open one store and then facing the same obstacles for a second store, the Polish government passed a law saying a company could own only one pharmacy.

"We had to start a full campaign to change Polish policy that involved the Canadian ambassador; Shimon Peres from Israel; and Ronald Lauder, of Estée Lauder," Reitblatt says. The law was changed back in 2003, and today Super-Pharm has 43 stores in Poland.

Super-Pharm faced similar fits and starts in China, which limited foreign ownership of pharmacies, and is now remodeling a chain of drugstores it bought in Beijing.

Where does Reitblatt get his determination to grow? "From living in a small country with limited potential," he says. "Growth is extremely important to keeping a young spirit at the company and offering your people new opportunities." -Ronna Kelly

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