Tully’s Coffee files for bankruptcy protection; Issaquah store is unaffected
October 10, 2012
By Warren Kagarise
NEW — 4 p.m. Oct. 10, 2012
Tully’s Coffee filed for bankruptcy protection Wednesday, but the chain founded by Issaquah High School alumnus Tom Tully O’Keefe does not plan to close its local store.
The chain announced the Chapter 11 filing and the closing of underperforming stores in Seattle, Kirkland and Redmond, plus plans to renegotiate leases for the remaining stores. Executives said rising commodity prices and challenging lease economics contributed to the bankruptcy decision.
“The company will continue to have a formidable presence in the Puget Sound area, focusing on our core mission of serving the highest quality coffee in a warm and comfortable environment with outstanding customer service,” CEO Scott Pearson said in a statement.
Tully’s operates a local store in Pickering Place, 1171 N.W. Sammamish Road.
O’Keefe founded Seattle-based Tully’s in 1992, just as rival Starbucks Coffee started to whet consumers’ appetites for specialty coffee. Tully’s struggled for years to earn a profit and stand out in a crowded coffee marketplace dominated by Seattle-based Starbucks.
O’Keefe stepped down as Tully’s CEO in 2001 and retired as board chairman in June 2010.
The bankruptcy filing does not impact the wholesale and online Tully’s business and brand. Green Mountain Coffee Roasters, Inc. purchased the wholesale business in 2009, and the $40 million deal allowed Tully’s to pay off some debt.