another one bites the dust

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Elephant Pharm closes its stores

Victoria Colliver, Chronicle Staff Writer

 

Tuesday, February 3, 2009

 

 

 

(02-03) 14:22 PST BERKELEY -- Elephant Pharm, a Bay Area drug store chain known

for its holistic approach to health remedies, abruptly closed all three stores

on Tuesday and announced plans to file for bankruptcy.

 

 

The drug store chain, which is based in Berkeley and also has stores in Walnut

Creek and San Rafael, employed about 190 people at all locations, including its

home office. A Los Altos store, which opened about two years ago, closed earlier

this fall.

 

The company, which offered traditional prescriptions along with Chinese herbs,

yoga supplies and other alternative products, cited the downturn in the economy

and accompanying tightening of the credit markets for its decision to liquidate

under Chapter 7 of the U.S. Bankruptcy Code.

 

" The company has been burdened with obligations that were quite difficult for a

company of our size to carry, " Elephant Pharm's chief executive officer, Kathi

Lentzsch, said in a statement.

 

Over the past year, Elephant Pharm continued discussions with potential

investors, cut costs and closed the Los Altos store in an unsuccessful effort to

avoid Tuesday's decision, the company said.

 

" The current management team and board of directors worked diligently to grow

the company to a size that could bear these obligations, " Lentzsch said, " but

due to the current economic conditions and the tightening of the credit market,

it has not been possible to raise the capital required to continue the

business. "

 

Elephant Pharm, which opened its first store in Berkeley in 2002, was founded by

self-described serial entrepreneur Stuart Skorman, who also started Reel.com and

the now defunct Hungryminds.com in the height of the dot-com boom. In 2005,

Lentzsch took over as CEO from Skorman, who has no involvement in the company.

 

In the fall of 2005, the company raised $26 million from Tudor Investment and

the Bay Area Equity Funds. Giant drugstore chain CVS also has invested in

Elephant Pharm.

 

On Elephant Pharm's Web site, the company left this message to its customers:

" It's been a very special six years since we've started this drugstore

revolution, and we certainly couldn't have made it this far without you - our

customers. We hope you continue your pursuit of a good, long life, well lived. "

 

E-mail Victoria Colliver at vcolliver.