Will 'McDreamy' beat Starbucks?
Actor Patrick Dempsey of TV's 'Grey's Anatomy' is locked in a fierce fight with the coffee giant for the Tully's chain. A decision on who gets Tully's may come Friday.
The battle is for Tully's, a smallish coffee-house chain that's some 20 years old and currently operating under Chapter 11 bankruptcy protection.
A week ago, bidders made offers for Tully's, and Dempsey, who plays Dr. Derek Shepherd on ABC's "Grey's Anatomy," thought his Global Baristas LLC had won Tully's for $9.5 million.
On Twitter, he crowed: "We met the green monster, looked her in the eye, and...SHE BLINKED! We got it! Thank you Seattle!"
The green monster being Starbucks.
Maybe McDreamy hasn't won yet. Starbucks and AgriNurture, which owns Tully's franchises in Asia, are asking a bankruptcy judge in Seattle to take their combined $10.6 million bid instead. A hearing will be held in Seattle on Friday.
Starbucks would take 25 Tully's stores and convert them to Starbucks stores. AgriNurture would take the 22 remaining stores and retain its Asian business and continue to use the Tully's name.
There are also 83 franchised or licensed locations in Arizona, California, Colorado, Idaho, Montana, Oregon and Washington as well as the Asia franchises.
Tully's has had a long and, let's be frank, painful life. Founded in 1992, Tully's struggled to turn a profit even after the 2009 sale of its wholesale business to Green Mountain Coffee Roasters (GMCR) for $40 million. That deal allowed Tully's to wipe $19.3 million in debt off its books and distribute nearly $6 million to shareholders.
But it couldn't compete efficiently against Starbucks.
In 2010 and 2011, the company tried to right-size its business through aggressive cost cutting. Then it decided it would need to close a substantial number of stores to become profitable. It filed for bankruptcy protection in October and shut down 19 unprofitable stores.
The coffee shop business is brutal because of the competition from Starbucks and competitors such as Panera Bread (PNRA) and the probability that Dunkin Donuts, owned by Dunkin' Brands (DNKN), would begin expanding rapidly in the West.
Caribou Coffee (CBOU), a Minneapolis chain, recently agreed to be acquired by Joh. A Benckiser Group, a German-Austrian company, for $16 a share or $340 million. Benckiser had previously agreed to buy Peet's Coffee, a California company.
More on Money Now
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The stock market ended the holiday-shortened week on a mixed note as the Dow Jones Industrial Average shed 0.1%, while the S&P 500 added 0.1% with seven sectors posting gains.
Equity indices faced an uphill climb from the opening bell after disappointing quarterly results from Google (GOOG 536.10, -20.44) and IBM (IBM 190.04, -6.36) weighed on the early sentiment. Google reported earnings $0.15 below the Capital IQ consensus estimate on revenue of $15.42 ... More
More Market News
Serious issues like drought and the deterioration of the developed world spell opportunity for this industry leader.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'