Tully's Coffee has hired D. A. Davidson, a Montana investment firm, to "explore strategic and financial alternatives," the Seattle coffee...

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Tully’s Coffee has hired D.A. Davidson, a Montana investment firm, to “explore strategic and financial alternatives,” the Seattle coffee chain said today.

Founder and Chairman Tom O’Keefe said it could lead to many things, including Tully’s raising more capital or making strategic investments. It does not mean Tully’s is selling, he said, although “if the price was right, obviously we would.”

But others saw the announcement as a gigantic “for sale” sign.

“They’re broadcasting to everybody that they’re for sale,” said Michael Butler, chairman and chief executive of Cascadia Capital, an investment banking firm in Seattle that did work for Tully’s several years ago.

He and others doubt Tully’s will find a buyer.

“It’s an interesting brand, but the numbers are not where they need to be,” Butler said. “There’s a lot of debt on the company. It’s losing money; it can’t keep management. I think it’s going to be tough.”

Dan Geiman, an analyst who follows Starbucks for McAdams Wright Ragen, said Tully’s has attractive locations but is in an awkward niche. It has about 140 stores in seven states.

“They’re not small enough to have the coolness factor that some coffeehouses around here have, but they’re not the scale of Starbucks,” he said.

Since Tully’s announced plans to go public last year, “it seems like it’s just been one thing after another,” Geiman said.

Tully’s postponed its initial public offering last summer, citing turmoil in the stock market. It had hoped to raise about $34.5 million by selling a 39 percent stake in the company. The money would have been used to open new stores and repay $7 million in debt, among other things.

Last month, it agreed to pay $6 million to settle a legal dispute with a company that had been licensed to open Tully’s stores in Asia outside of Japan. It also formed a joint venture with a Singapore company to develop its brand in Australia, New Zealand and Asian countries excluding Japan.

Shortly afterward, Chief Executive John Buller and Chief Financial Officer Kristopher Galvin left the company, and Tully’s laid off about 14 headquarter employees. Buller had been Tully’s sixth top executive since O’Keefe relinquished the CEO title in 2001.

Tully’s has lost money for years, accumulating total losses of more than $88 million. In the second quarter ended Sept. 30, it posted a net loss of $3.3 million.

O’Keefe has hinted at wanting to sell before.

Last summer, he said the chain regularly gets calls about it. Although most are not serious offers, he said, Tully’s looks into each inquiry.

“There isn’t one individual at this company who has the kind of ego that says, ‘I don’t care what they pay us, I’m going to run this company forever,'” O’Keefe said last June.

Melissa Allison: 206-464-3312 or mallison@seattletimes.com