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tullys.jpg

Tully's Coffee founder says it's a 'sad day'

BY Linda Thomas  on October 10, 2012 @ 5:56 pm (Updated: 1:05 pm - 10/11/12 )

After struggling with cash flow and dealing with changes in leadership over the years, Seattle-based Tully's Coffee has filed for Chapter 11 bankruptcy protection.

The bankruptcy papers were filed in federal court in Seattle Wednesday. There will be a court hearing Friday. The bankruptcy filing listed $5.9 million in personal property as the company's only assets and $3.7 million in total liabilities, including $2.6 million in unsecured credit.

Tom "Tully" O'Keefe started the coffee chain in 1992, proclaiming its coffee didn't have the dark, bitter taste of a Starbucks cup of coffee. Since then the coffee chain had cash-flow issues and management changes that prevented the company from distinguishing itself.

O'Keefe's response, in an emailed statement:

"It is a sad day in the history of Tully's; for its shareholders, employees and customers. Suffice it to say that the most important aspect of managing a business, or serving on its board of directors, is to protect the owners of the business, its shareholders, and make decisions in their best interest. Once I have had a chance to review the filing with my advisors I will be in a better position to comment."

In an April 2011 one-on-one interview with O'Keefe, he didn't add any sugar to the company's history.

O'Keefe says Tully's burned through cash as it tried to expand, and he admits they made some bad hiring decisions after he stepped down as CEO.

"We've had a few leaders in the past that, God I'd love to meet their kids because I can't imagine these people were ever compassionate towards their kids needs because they just beat the hell out of our employees," he says.

In 2010, O'Keefe took himself out of his own company, although he remains the largest shareholder.

"In one way, leaving was one of the most difficult decisions I've ever made, in another way it was the easiest thing because I was going to kill someone," he half jokes. "The problem was I was concerned it was going to be me."

When I talked with O'Keefe a year ago he was optimistic about Scott Pearson as a new leader.

O'Keefe describes Pearson as someone who is "refreshing" with "great ethics" who cares about employees and shareholders. Pearson has a background with Coca Cola and IBM, and most recently was executive vice president at Advanced H2O, a local bottled water company. Pearson started his new job April 1, 2011 with a lot of work to do.

Now Tully's, which has been closing stores around the country, will close stores in Wallingford, Madison Park, Columbia Tower, Fourth Avenue and Union Street in Seattle Sunday. They'll also close the doors on stores in Redmond and Kirkland.

Podcast: Tom Tully O'Keefe discussing why he stepped down from the company he started, and what he's been doing since.

By LINDA THOMAS, I don't drink coffee but I liked the Tully's in Ballard that closed a while ago.

Linda Thomas, KIRO Radio Morning News Anchor
Linda is the morning news anchor and features reporter for KIRO Radio and one of the most followed local journalists on social media.
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Comments (21)


  • Add A Comment

  • qgcandrey wrote...
    Free market
    October 11, 2012 8:42 am
    Tully's coffe was not so good at all. You can hate Starbuks, but quality of servise says for itself. People chose better quality and servise. Someone should loose, someone who has worst.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Lillyrose125 wrote...
    Lose not Loose
    October 11, 2012 3:25 pm
    Learn how to spell.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • DesertRez wrote...
    You guys
    October 11, 2012 8:49 am
    Don't have Dutch Bro's? 2$ for a cup o' Americano straight up. It's better coffee than Starbucks without the pretentious hipster dorks loitering.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Citizen of Krazy Town wrote...
    Tully's was my introduction to Seattle Coffee culture
    October 11, 2012 8:54 am
    When I moved back to the area in 1995 after 20 years away, the east coast was still all about Dunkin Donuts and a giant watery coffee with cream and sugar was called a "Large Regular".

    I began working in the Seafirst Tower at Bellevue Place and at that time, there was a Tully's in the lobby right next to the elevators going to my floor. Every day, my co-workers and I would stop in and the Baristas all knew us by name, knew what we liked to order, and really took an interest in bantering with us and generally providing a very open and friendly atmosphere that was unique in the Seattle area and totally different than any northeast experience.

    I hope that Tully can make a comeback but I fear that times have changed too much to make the old model relevant anymore. Now, Starbucks is much more like the Dunking Donuts of my past with long queues of cranky people just trying to get their coffee and scone and then get the heck out or else they hole up with their laptop or iPad and slurp free wireless and ignore the world around them. Somehow, Tully needs to think of a way to get folks back out of their shells and enjoying the community of gathering around good company and good coffee.,,,

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • CyberRacer wrote...
    Good Riddance to Bad Coffee
    October 11, 2012 9:28 am
    You can talk about changes of leadership all you like, but bottom line for me was an inferior product. I've had coffee all over the area, and to me Tully's always tasted odd.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • hnuh wrote...
    Dutch Brothers
    October 11, 2012 10:50 am
    Great coffee.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Snout wrote...
    Too bad they didn't have some union thugs there.
    October 11, 2012 11:51 am
    Or they'd get some Obama cash to bail them out and screw the bond holders as with General Motors. Suckers.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • CH wrote...
    CH = MORON / Mr Flopper= MORMON . . . .
    October 11, 2012 4:01 pm
    He he It's Me me.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • { "Thumbs Up":"1","Thumbs Down":"-1" }