What's impacting the Wesfarmers share price on Thursday?

A change of management of an important business has put Wesfarmers in focus.

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Key points

  • Wesfarmers shares are slightly in the green today 
  • There is a new leader of the Australian Pharmaceutical Industries (API) business 
  • Wesfarmers is attracted to the long-term attributes of the healthcare sector 

The Wesfarmers Ltd (ASX: WES) share price is currently in the green amid news that Australian Pharmaceutical Industries (API) has a new boss.

Wesfarmers shares are up around 0.1% and the S&P/ASX 200 Index (ASX: XJO) is also up around 0.1%.

Wesfarmers Health is the new division of the company which will be the home of businesses within the space of health, beauty and wellbeing.

According to reporting by the Australian Financial Review, Wesfarmers Health boss Emily Amos is now in charge of running API after Richard Vincent stepped down.

Vincent has reportedly decided to move into an advisory role, so Wesfarmers Health will still be able to benefit from this.

API was the first move by Wesfarmers into the health sector, but Wesfarmers leader Rob Scott said that it will look at any further acquisitions through a "consumer lens" according to the AFR. Beauty and skincare products, as well as digital health, could be areas of interest.

Over time, this segment could have a growing influence on the Wesfarmers share price.

What are some of the positives of moving into healthcare?

Wesfarmers is attracted to healthcare because it's "an important, large sector with long-term growth tailwinds". From 2019-2020 to 2060-61, the population aged 65 and over will double to 8.9 million.

The company says that there is increasing demand for health, beauty and wellbeing products and services. Wesfarmers noted that customers are becoming more interested in health and wellness. There is also increased focus on preventative health measures and treatments.

Management believes that 'data and digital' can transform the customer journey in healthcare. There are "opportunities to leverage technology to improve health outcomes".

Wesfarmers stated:

With strong fundamentals and the ability to leverage group capabilities, Wesfarmers Health can deliver superior returns over the long-term.

In terms of the API business, there are three segments. There's the pharmacy distribution segment which is one of only four national full-line pharmaceutical wholesalers. Priceline is another segment, which is a leading network of franchised pharmacies and retail stores. Clear Skincare Clinics has a growing footprint in the fragmented and "high growth" non-surgical aesthetics market. It also has an expanding range of high margin own label products.

Wesfarmers share price snapshot

Over the past month, Wesfarmers shares have risen by around 8%.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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