Tully's explores its options

SEATTLE Tully’s Coffee Corp. has hired investment banking firm D.A. Davidson & Co. to explore “strategic alternatives” that could include a sale of the struggling 142-unit chain.

The move follows a management restructuring last month, during which Carl Pennington Sr., a former grocery chain executive, was named president. Pennington replaced John Buller, who resigned along with chief executive and chief financial officer Kristopher Galvin.

Tully’s has posted operating losses for each of the past three full fiscal years and for the six months ended last Sept. 30. The company postponed an initial public stock offering last year, blaming market conditions, and recently laid off 14 headquarters staffers because of the delay.

“With the public markets continuing to be in such a volatile state, we need to look at all appropriate strategic opportunities that allows us to expand our retail and wholesale presence and enhance our shareholder value,” said Tom O’Keefe, Tully’s chairman and founder.

O’Keefe told the Seattle Post Intelligencer that strategic alternatives could include: expanding the company organically and not raising additional cash; finding new investors; forming a partnership with another company that may or may not sell specialty coffee; and selling the company.

The preference, he noted, is to bring in more capital and keep growing.