Wesfarmers (ASX:WES) has attributed the collapse of Australia's largest Priceline franchisee, Infinity Pharmacy, to an aggressive, debt-fueled expansion strategy that left the business unable to meet its financial obligations.
The WA-based conglomerate revealed it had no choice but to place 56 of Infinity's 92 stores into receivership through KPMG in December 2025, after negotiations to recapitalise the company failed.
The remaining stores were subsequently placed into administration by Infinity’s directors.
In a statement to franchisees, Richard Pearson, chief customer officer of Wesfarmers' health division, said Infinity’s management had pursued rapid growth by acquiring new pharmacies using high-interest debt, even as the business struggled to pay suppliers, including Wesfarmers’ Australian Pharmaceutical Industries, which owns the Priceline brand.
"This expansion came at the expense of Infinity meeting its financial obligations," Pearson said.
KPMG, together with advisory firm Teneo, is now seeking buyers for Infinity stores to help recover approximately $400 million owed to creditors.
Pearson stressed that stores under receivership and administration were operating normally, with staff being paid and stock available for customers.
Wesfarmers acquired Priceline through its 2022 purchase of API, establishing the foundation for a health division alongside its Bunnings, Kmart, and lithium businesses.
Pearson said the decision to call in KPMG followed extensive engagement with Infinity management and creditors, concluding that the company's "over-leveraged approach to network growth" risked undermining trust in community pharmacies.