BERKELEY, Calif. The challenging economy claimed its latest retail victim Tuesday, as Elephant Pharm shuttered its three locations for good after filing for liquidation under chapter 7 of the United States Bankruptcy Code.
The chain’s three locations had been open on Monday.
“The company has been burdened with obligations that were quite difficult for a company of our size to carry,” Elephant Pharm CEO Kathi Lentzsch stated. “The current management team and board of directors worked diligently to grow the company to a size that could bear these obligations, 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.”
That suggests the Elephant business may have failed more because of its lack of heft — Elephant fielded the buying leverage of only three locations to fill store shelves in a full-size 12,000-square-foot-plus footprint — than because of its pharmacy business vision as a pharmacy that dispensed both traditional allopathic medicines and Ayurvedic herbs.
Pharmaca, based in Boulder, Colo., fields a similar business model, albeit in a much smaller retail box. Averaging 5,000-square-feet per location, the 23-store chain has secured some $20 million in financing this past spring and has more than doubled in size in the past year.
Executives at Elephant Pharm had been trying to secure additional financing in an exceedingly financing-poor market for the past year. The chain closed its Los Altos, Calif., location, which had been its fourth store, this past September. “In spite of these efforts, the company was ultimately unable to meet its mounting obligations and regretfully had no choice but to close its stores,” the company stated.
“We are extremely proud of our team and what we were able to accomplish in the 6 years since we opened. We would like to thank our vendors and our very loyal customers for their support over the years.” Lentzsch said. “Elephant has been both a leader in its industry as well as a reflection of a greater societal movement for healthy change.”
Elephant Pharm employed 190 people across its three stores and at the home office.