Drugstore pioneer: Deusmar de Queiros took an unconventional path when building Brazil's first national network of pharmacies. Now he is going to the markets to keep his retail chain Pague Menos growing.

Author:Ogier, Thierry


SAO PAULO -- Francisco Deusmar de Queiros is in a hurry. His brother-in-law and business partner has just sent him an image of the new jet he is collecting in Fort Lauderdale, and the retail executive is already primed for takeoff. "This one can fly from Fortaleza to Lisbon, or from Fortaleza to Buenos Aires nonstop," said Queiros, who would put a private jet to good use by keeping tabs on his fast-growing and fax-flung drugstore chain.

From a base in Fortaleza, the capital city of 2.5 million in the northeastern state of Ceara, Queiros has over three decades built a national empire of more than 400 Pague Menos stores. He was the first retailer of any type to establish a presence in every one of Brazil's 26 states as well as the federal district of Brasilia. A man of simple manners, who most people call Deusmar (which translates as "Seagod"), the hands-on executive insists on personally choosing locations before closing the deal.

The executive estimated that the company ended 2010 with sales of 2.2 billion reais ($1.3 billion), an increase of 20 percent over 2009. Queiros predicts revenue will again surge by more than 20 percent this year, to reach 2.7 billion reais by year-end 2011.

Queiros aims to open more than 40 stores during 2011. To finance future growth, Pague Menos is looking to the capital markets, as the company president sets his sights on a $600 million initial public offering on the Sao Paulo exchange by October.

Pague Menos is Brazil's top pharmacy chain by revenues and second-largest by number of outlets, according to Brazilian Association of Pharmacies and Drugstores (Abrafarma).

Queiros has pursued a strategy that is unconventional by local standards yet has proved wildly successful Most Brazilian entrepreneurs would start a business in large metropolitan markets, such as Rio de Janeiro or Sao Paulo, before seeking to expand across a nation of continental proportions. Queiros, a stockbroker who studied economics, opened his first pharmacy in his native state of Ceara 30 years ago.

In Bahia, the largest state in the northeast, Pague Menos first set up not in the capital of Salvador, but in Teixeira de Freitas, a smaller, regional agricultural hub.

"Wal-Mart did not come from big cities. It grew from small cities," said Queiros, who is heavily influenced by U.S. retail culture.

And like the U.S. retail giant, Pague Menos has leveraged the scale of its network to offer customers competitive prices.


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