Tully's Coffee

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Tully's Coffee Corporation
Industry Restaurants
Founded 1992
Headquarters Seattle, Washington, United States
Number of locations
47 in western U.S. states;[1] brand licensed to Tully's coffee houses in Japan and South Korea
Key people
Tom T. O'Keefe, Chairman
Scott Peterson, President and CEO
Products Coffee
Revenue $36 million (2012 est)[2]
Number of employees
480 (2012)[3]
Website tullyscoffeeshops.com
Typical Tully's Coffee store

Tully's Coffee is a specialty coffee retailer and wholesaler based in Seattle, Washington, United States. Its stores serve specialty coffees, espresso, baked goods, pastries, and coffee-related supplies. It also has overseas licensing agreements in Japan and South Korea where its brand name is used for Tully's coffee houses in those countries. Tully's Coffee is well known for once following an expansion strategy of opening stores adjacent to those of the considerably larger coffee chain Starbucks, also based in Seattle.


Tully's opened its first store in Seattle, Washington in 1992.[4]

The founder of Tully's Coffee, Tom Tully O'Keefe, planned to rival the quickly expanding Starbucks coffee. Tully's quickly developed into a strong regional specialty-coffee retailer that was concentrated in Puget Sound, where coffee loyalty is so deep there is one coffee shop for every 4,000 people. In 2006, Tully's made its first net profit. More recently, the president and CEO has described Tully's focus as no longer on competing against Starbucks, but on serving fine hand crafted coffee and expanding into the wholesale market.

It operates stores in the Greater Puget Sound area of Washington, San Francisco, Los Angeles, Idaho, Arizona, and licenses its brand for use in South Korea and Japan. It has also opened one store in Stockholm, Sweden. Tully's sold the most profitable unit of the company—its Japan partnership—for US$17.9 million in September, 2005.

In August 2007 plans for an IPO were placed on hold with the company, citing a "volatile market." This decision was made right after the company was unable to secure investor financing for the IPO. Fiscal 2006 losses amounted to $9.7 million.

Tully's sold its bean distribution business and brand to Green Mountain Coffee Roasters in 2008, earning $40.3 million in the deal, allowing them to pay off part of its balance sheet of $102.1 million and expand its retail business.[5]

In 2010, Tully's Coffee International and DK Retail Co., Ltd. entered into a Master Licensing Agreement to develop up to 100 retail stores in South Korea.[6]

Founder and Chairman Tom O'Keefe retired in 2010.[7][8]

Tully's Coffee filed for Chapter 11 bankruptcy in October 2012, citing low cash reserves and the need to renegotiate leases with landlords. At the time of the filing Tully's had recently closed or was about to close 17 unprofitable company-owned stores.[8] Global Baristas, an investment group led by actor Patrick Dempsey, had the highest bid of US$9.15 million to buy Tully's at a bankruptcy auction on January 3, 2013.[9] U.S. Bankruptcy Court Judge Karen Overstreet subsequently approved the sale to Global Baristas, rejecting objections from Starbucks and other prospective buyers.[10] The deal became final on the last minute of June 30, with all employees keeping their jobs and getting a bonus of two vacation days as a "thank you" for their commitment to the company.[11]


Tully's uses standard hot cup sizes: 8 US fl oz (240 ml) short, 12 US fl oz (350 ml) tall, 16 US fl oz (470 ml) grande, and 20 US fl oz (590 ml) veinte. Until October 2009, iced drinks were 4 US fl oz (120 ml) larger in order to accommodate the addition of ice to the drinks. All of its espresso drinks were made using organic and fair trade beans, but this was discontinued near the end of 2008. Tully's signature drink is the Bellaccino - similar to Starbucks's Frappuccino, it consists in a blend of milk (non-dairy options included), ice, and other base ingredients such as flavorings and sauces; it is usually topped with whipped cream. [12]

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