Pharmacy Chain Pharmaca To Grow With Insider Series G Boost

By Lorie Konish

Seeing potential openings in its existing markets, traditional and holistic pharmacy retail chain Pharmaca Integrative Pharmacy Inc. has raised an $8.4 million insider Series G round to support its expansion.

Participants in the round included existing investors Great Spirit Ventures, Highland Capital Partners, Physic Ventures and Richard L. Scott Investments. Valuation was not disclosed. An inside round provided the "easiest way of raising continuous working capital," said Pharmaca founder and Chairman Barry Perzow.

Founded in June 2000, Pharmaca operates a network of stores that combine traditional pharmacy products and services with alternative medicine and preventive supplements. Through its brand, Pharmaca works to build interaction with customers through an expert staff and lectures and events.

While current economic conditions have impacted consumer spending, Pharmaca has maintained positive same-store comps, Perzow said, while declining to elaborate on revenue numbers. In particular, the company's prescription and dietary supplement businesses are doing well, while other areas including natural and organic beauty continue to grow, he said.

Pharmaca's positive market feedback contrasts with the failure of onetime competitor Elephant Pharmacy Corp., which closed its doors earlier this year. Elephant, which raised about $49 million in venture capital, shuttered its three California locations and sought Chapter 7 bankruptcy liquidation in February after failing to raise new capital.

Part of what potentially made Elephant's business model cumbersome, Perzow said, was the size of its stores, which ranged from about 12,000 to 14,000 square feet. Pharmaca's stores are smaller and more concentrated, typically ranging from 3,500 to 4,500 square feet, Perzow said.

With the new funding, Pharmaca plans to fund expansion, which it continues to evaluate based on market conditions. The size of the expansion will depend on the shifting real estate market, potential acquisition deals and the rate at which the company decides to grow, according to Perzow.

Pharmaca, currently with 23 retail locations in California, Colorado, New Mexico, Oregon and Washington, plans to add new locations in those existing markets. New locations could come either from acquiring existing pharmacies or establishing new stores.

"We think the next two or three years offer ample opportunity for filling in those markets," Perzow said. "We think we will go beyond those, but that won't be for a while."

For now, Pharmaca does not have additional fund-raising or exit plans as the company forms its expansion strategy. The company last month named Mark Panzer, who had served as chief operating officer of the company since October 2008, to the position of chief executive. Panzer replaces Perzow, who will focus on the founding vision and branding and its translation into the retail space, including the creation of new educational programs.

Pharmaca currently has 55 employees in its Boulder, Colo., headquarters and 320 employees in its stores.