With the recent bankruptcy of Drogisterij.net, the oldest existing online pharmacy in the Netherlands has closed. Entrepreneur Jaap Santifort founded the company in 1999, the year in which online stores and trading platforms such as Bol.com, Coolblue and Marktplaats were also founded.
These peers grew into billion-dollar companies, while countless other online stores collapsed. Drogisterij.net managed to run as a successful mid-market engine for two decades, but eventually failed. Founder Santifort looks back.
Early online store
Santifort was handy with computers and started selling pharmacy items over the internet in 1999. “I come from a real pharmacy family, so it felt familiar to choose these products.”
As things began to pick up speed, the young entrepreneur quit his job as an IT specialist and became a full-time online reseller. “To finance the business, I sold my house and temporarily moved into a caravan.”
To begin with, Santifort was a pioneer from the basement of the family’s pharmacy in Stellendam on the South Dutch island of Goeree-Overflakkee. The first years were not easy. “The disadvantage of pharmacy products is that, unlike books or CDs, for example, they are very easily accessible everywhere. There is a pharmacy on every street corner, and supermarkets also sell shampoo and deodorant.”
Moreover, Drogisterij.net started in an insane era of e-commerce, where investors sometimes poured capital into companies with dotcom behind their names.
For example, Santifort’s start-up online store had to compete with PharmaPlaza, a competitor that had raised many millions of growth from investors, including Maurice de Hond.
In 2000, the Internet bubble burst, causing many online stores – including PharmaPlaza – to collapse.
According to Santifort, he kept his head above water because Drogisterij.net had always kept an eye on the expenses. “PharmaPlaza spent capital on advertising and had fourteen employees, thirteen of whom were directors. We, in turn, were frugal and listened to the customer who paid for our sandwich.”
Santifort did not care about the turn in the mood. “At parties, people initially reacted in awe when they were told they had an online store. Then it got annoying. I never cared because we kept growing.”
Drogisterij.net quickly moved to its own industrial hall in Stellendam, which was expanded to 2,000 square meters. Later, the company opened another branch in Rotterdam.
The company grew steadily to a turnover of more than 7 million euros in 2011. With a 76th place in the top 100 webshops in the trade magazine Twinkle, it was the largest online pharmacy in the Netherlands at the time.
It took until 2006 before the company really started making a profit, Santifort once said in an interview. Thanks to that profit and his many years of advantage, he said he was not worried about his competitors at the time.
Nevertheless, the entrepreneur felt the competition. For example, between 2007 and 2011, parties such as DeOnlineDrogist, Koopjesdrogisterij.nl and Drogist.nl entered the market. According to Twinkle’s annual online store ranking, the first of these Drogisterij.net went on sale in 2014.
In addition, traditional pharmacies such as Kruidvat became active on the Internet. Book online store Bol also started selling shampoo at some point. “It’s the law of the inhibiting edge. If you do something right, others will copy you,” Santifort says, looking back.
“We have long been successful in offering just the right products at an early stage. Thanks to our own stocks, we were able to deliver quickly. But competitors see what you offer and take over. And when a wholesaler started shipping per competitor, our fast delivery lead was lost. “
Nevertheless, the outlook remained good, especially when Drogisterij.net managed to get investor BB Capital on board in 2011. The investment company of Henk van Koeveringe, the owner of the Roompot holiday parks, acquired a majority stake. Santifort still held 35 percent of the shares.
With the money and expertise from BB Capital, Drogisterij.net had to make a new growth spurt. For this purpose, the online store took over a number of competitors, such as Slankelijn.nl and I-drogist.
Revenue DKK 15 million
According to Santifort, Drogisterij.net achieved a turnover of 15 million euros at its highest with about a hundred employees. “Compared to Bol or Coolblue, it’s not much, but it made us one of Stellendam’s most important employers. So it depends on how you look at it.”
However, continued growth masked problems. “BB Capital seemed like a suitable partner for me, also because they come from Zeeland. I felt better about this than with the more arrogant parties from Randstaden, who promise mountains of gold but do not perform. But in the end it turned around. to not be a happy marriage. “
According to Santifort, the acquisition was financed by BB with debt that fell on the company’s shoulders. “It resulted in the company having to pay its own acquisition debt. All kinds of administration fees also had to be paid.”
Investment director Frederic de Visser in BB Capital does not want to answer in real terms. “Due to confidentiality, we can not make any announcements about this.” In any case, it is clear from a court ruling that the ambitious internet pharmacy was already on the verge of bankruptcy in 2017 after five years under the wings of the investor.
That year, BB Capital sold the online store for 1 euro to investor Goeyland, which is affiliated with the North Dutch pharmacy wholesaler Vriesia.
“Given the volumes that webshops have to run today, we thought we could close it down by selling the company to Vriesia, a strategic partner with sufficient expertise and scale,” says De Visser.
“The new owners mainly bought the revenue,” Santifort says. “As a minority shareholder, I had to sell my share against my will and thanks. I stayed as a director for a while, albeit in paid work.”
Termination of pins
Tensions quickly arose between the founder and the new owner, as evidenced by the aforementioned court decision. Santifort was fired at the end of 2018, and in early 2019 was awarded a severance pay of 27,000 euros.
The ruling shows that founders and owners did not agree on the commercial strategy, i.a. According to Santifort, it was best to meet consumer demand, while Goeyland and Vriesia primarily wanted to sell advantageously purchased lots via the online store.
Drogisterij.net also appears to have faced major problems at the time they processed orders. “If yields fall, momentum goes out,” Santifort says now.
After leaving Drogisterij.net, the entrepreneur started doing other things. “First, I cleared my head for a while because I had to work a lot. Now I earn a living as a consultant for SMEs in online entrepreneurship. And I have the sales rights to some health products, such as seats for back pain.”
The last few years
After the founder’s departure in 2018, Drogisterij.net managed to keep it going for another four years. The online store no longer worked really convincingly. The Internet pharmacy also failed to capitalize on the increased demand for health items following the outbreak of the corona pandemic.
The latest annual accounts show that by the end of 2020, the online store was still in bad shape financially. Data on revenue and profit or loss are missing. But with negative equity of more than 1 million euros, the company was already technically bankrupt.
In the report, however, Drogisterij.net writes that it can be expected to survive, thanks to a restructuring and corona support from the government.
It ultimately failed. On May 23, the online store was no longer able to meet its financial obligations and was granted deferral of payment. The bankruptcy followed two days later. Curator Gertjo Helmig, who did not respond to requests for explanation, must file for bankruptcy.
Hoping for a restart
Jan Heimenberg from investor Goeyland says that he and shareholder Henk van der Meer do not want to comment on Drogisterij.net’s bankruptcy. “We do not intend to release any information. To protect the other companies in which we participate, it is not wise.”
However, he says that Goeyland and the wholesaler Vriesia have no plans to restart the online store themselves.
Although founder Santifort has not been involved with Drogisterij.net for several years, he says he hopes for a restart. “I still live in the area and hear about it. As a founder, I am proud of the company and hope that the name can continue to exist. It is also important for the employees, because then they might be able to keep their jobs.”