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Elephant Pharm Closes

By Riya Bhattacharjee
Wednesday February 04, 2009 - 06:59:00 PM

Elephant Pharm, which opened in Berkeley six years ago as a pharmacy promoting holistic health merchandise, closed down its three stores and declared bankruptcy Tuesday, blaming the economic downturn and the tightening of the credit market. 

Kathi Lentzsch, Elephant CEO, said in a statement that the company filed for chapter 7 bankruptcy after failing to raise capital and will seek liquidation. 

“The company has been burdened with obligations that were quite difficult for a company of our size to carry,” she said. “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.” 

Lentzsch said that the company, which has 190 employees, had been in continuous discussions with potential investors over the past year and cut costs significantly by closing its Los Altos location in September and downsizing corporate staff but was ultimately left with no other choice but to close its stores in Berkeley, Walnut Creek and San Rafael. 

"We are extremely proud of our team and what we were able to accomplish in the six years since we opened,” Lentzsch said. “We would like to thank our vendors and our very loyal customers for their support over the years. Elephant has been both a leader in its industry as well as a reflection of a greater societal movement for healthy change." 

Elephant has instructed former customers who have prescriptions on file with the store to contact their doctors if they need refills. 

Former employees told the Planet that stocks started dwindling at the Berkeley store—a 13,000-square-feet space—almost four months ago. 

Customers and clients who came to the Berkeley store Tuesday morning to get their prescriptions and shop said they were surprised—and in some cases frustrated—to hear the news. 

Anastasia Russell, who came to pick up her prescriptions from Elephant around 11 a.m., stood in front of the store’s sliding glass doors with her hand on her head. 

“I received a call from the corporate office that they were closing down so I rushed here to get my vitamins,” she said. “But I didn’t get anything. I buy all my medicine here. Now I don’t know what to do. They had excellent customer service—it was a perfect spot. I am so much in shock. I have a heavy heart—I am really appalled.” 

Suzy and Eric Johannesson, returning a movie in the drop-box located in the pharmacy’s parking lot, stopped a few feet away from the building before walking up the steps to read the notice. 

“We were just returning a movie when we noticed people taking pictures,” Suzy said. “It’s really very sad ... We have bought a lot of stuff from here and like their products.” 

The couple, who live on Shasta Road, said they shopped in the Gourmet Ghetto regularly. 

“Another Berkeley business is going vacant,” Eric said. “We are going to go home and have a drink to drown our sorrows. What else can we do?” 

Starbuck’s recently closed across Shattuck Avenue from Elephant, and down the block, Waddle and Swaddle, a locally owned clothing boutique for babies and expectant mothers, which has been in Berkeley for eight and a half years, also had a out-of-business sign, its “Buy Local Berkeley” sticker still visible on the storefront. 

At Elephant, around 10 or 15 employees shuttled in and out of the store to collect their belongings and a couple of managers could be seen talking to clients inside. 

Gabe Dour, a former employee who was laid off Monday night, was handing out discount coupons for the Shen Clinic, a herbal pharmacy on the corner of Shattuck and Rose Street, where he works part time. 

“It’s a shame,” said Dour. “It was the hub of the community great model for what pharmacies could be and one of the first of its kind.” 

Dour said that he had started looking for a job almost four months ago when management stopped replenishing merchandise. 

“They have been telling us for a while that we could close but that there was still some hope,” he said. “Then they told us a week or so ago that we should look for a job. Apparently they made some phone calls to employees last night but I haven’t checked my messages yet. It’s a dicey situation since we have a lot of part time students working here as well as full time practitioners.” 

Dour said that the Berkeley location had around 60 employees, not counting its practitioners and teachers. 

“I know that everyone has been paid for the hours they worked,” he said, blaming the closing on the financial meltdown, explaining that it was becoming hard for the company to find investors who would finance expansion. 

A few customers took pictures of the “closed indefinitely” sign which read: 

“It is with a heavy heart that we post this notice: Elephant Pharm, which has served over 1 million customers in four Bay Area markets, has closed indefinitely. As a small business, we’ve been hurt by the terrible turn the economy has taken and the tightening of the credit market. It’s been a very special six years since we started this drugstore revolution, and we certainly couldn’t have made it as far as we did without you—our customers. We hope that you will continue your pursuit of a good, long life, well lived.” 

The notice also directed customers to the company’s website for further details and asked them to contact their doctor to have their prescriptions filled or re-filled. 

“We deeply regret any inconvenience this may cause you,” the notice’s end read. 

Mark Panzer, president of Pharmaca Integrative Pharmacy, which plans to accept all Elephant customer prescriptions and pharmacy coupons at its Solano, Mill Valley and Oakland locations called Elephant’s closing “unfortunate.” 

“We like having competition, it keeps us on our toes,” he said. “It’s like Circuit City and Best Buy. Unfortunately it looks like Elephant hit a hard time. Fortunately our business is strong and continues to stay strong.” 

Panzer said that if Elephants’ customers did not have a copy of their prescriptions, they could give Pharmaca their doctors’ phone number and the company would arrange refills. 

Sara Horowitz, another customer, waited in front of the store for 10 minutes before finally taking off. 

“I was hoping to buy some lavender chocolate,” she said. “I came all the way from Lake Merritt just to come to Elephant Pharmacy. I don’t get it. I am totally confused.” 

Stuart Skorman, who started, founded Elephant in 2002, focusing on offering health-conscious consumers a health- and wellness-minded product selection, good customer service and easy access to information through a free customer education program, selling merchandise that included over-the-counter drug store remedies, bulk herbs, vitamins, supplements, yoga gear, gifts, books and more.  

Skorman no longer has any connection to the business. 

In the fall of 2005, Elephant raised $26 million from Tudor Investment and the JPMorgan Bay Area Equity Fund, according to a company statement. National drugstore chain CVS also invested in Elephant. 

The store also offered a team of wellness practitioners who offered free, one-on-one consultations everyday and brought in local and visiting experts to lead hundreds of free classes and clinics every month at each store. 

“This is terrible, It’s my neighborhood,” said Elizabeth Wright, who has lived in North Berkeley for over 40 years. “It makes me feel very, very sad. I shopped here for myself and my grandchildren. My dog shopped here too. I am a great supporter of the local neighborhood and Elephant had such a lovely feeling of community. I shall miss that very much. I hope that something positive will happen so that they can open again.”