Wednesday, October 17, 2012

Tully’s Corp. files for Chapter 11

Parent company of coffee chain in debt

The former location of the Tully’s coffeehouse in Ketchum, in the Colonnade building at the corner of Sun Valley Road and Walnut Avenue, sits empty Tuesday, with dark paper covering the interior windows. Photo by David N. Seelig

The parent corporation of Tully’s Coffee filed for Chapter 11 bankruptcy protections last week, after shutting down eight of its unprofitable stores—including one in Ketchum—over the past month.

TC Global, doing business as Tully’s Coffee Shops and Tully’s Coffee Corp., filed for bankruptcy protection Wednesday, Oct. 10. 

The Associated Press reported last week that the company was poised to close nine more stores on Oct. 14, leaving 48 company-run stores in Arizona, California, Colorado, Idaho, Montana, Oregon and Washington. 

More than 70 other franchises of the brand remain in business across the country and in Asia.

The company told The Associated Press that it was struggling with lease obligations, commodity costs and underperforming stores.

According to a court filing, the company is more than $3.7 million in debt, most of which is owed to vendors such as Aramark for uniforms and Green Mountain Coffee Roasters for coffee.

The Seattle Times reported Wednesday that Tully’s has only turned a profit twice since its opening in 1992, in contrast to its more successful competitor Starbucks Coffee.

Tully’s closed its store on the corner of Sun Valley Road and Walnut Avenue in Ketchum on Oct. 1, 10 days before the company filed for bankruptcy protection.

Jack Bariteau, managing member of the building’s owner, Colonnade LLC, said the store had “gone dark” and simply shut its doors without alerting the owners.

“It does happen in the retail environment,” he said. “They don’t typically give you notice [in this type of situation].”

Tully’s Coffee had been a tenant of that building for 13 years. Bariteau said Colonnade LLC is already in talks with similar companies to open a new shop in that space in the near future.

Kate Wutz:

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