Caribou Coffee will close 80 underperforming stores and rebrand another 88 outlets to Peet's Coffee & Tea, just four months after a German firm purchased the chain, according to a story in the Star-Tribune of Minneapolis. "With 26 percent of its outlets closed or rebranded, Caribou will have its national footprint significantly diminished," the story said.
"Over the past few months, we have revisited our business strategy, have taken a hard look at our overall performance, and have made decisions that best position us for long-term growth," Caribou CEO Michael Tattersfield said in a statement.
The issue behind the rebrands is simply that the Peet's brand is considered much stronger nationally and it also "has a more upscale flavor to it," said Joe Pawlak, a vice president at restaurant consultant Technomic.
Caribou and Peet's will "maintain our own separate operations, brands and growth strategies," Tattersfield said in the statement. Caribou's senior leadership team will continue to operate Caribou as an independent company based in the Twin Cities, he said. Locations converted to Peet's will no longer be a part of Caribou. The store closings will occur Sunday.
After the changes, Caribou will be a chain of 468 outlets in Minnesota, the Dakotas, western Wisconsin, Iowa, Kansas, North Carolina, Denver and 10 international markets. After Minnesota, Illinois was Caribou's second-largest market with over 60 stores, many of them in the Chicago area. The company is closing the majority of its Illinois stores, the Chicago Tribune reported.
German conglomerate Joh. A. Benckiser (JAB) Group bought Caribou for $340 million in December, taking the once publicly traded company private. Benckiser earlier in 2012 also bought Northern California-based Peet's for nearly $1 billion.
At the time it bought Caribou, Benckiser gave no indication that it planned a strategic change. Benckiser's chairman, Bart Becht, said at the time that "Caribou has a fantastic brand and unique culture and fits perfectly with [the company's] investment philosophy of investing in premium and unique brands in attractive growth categories like coffee."
Reassembling Albertsons: It Won't Be Easy, But It Has To Be Fast
A Tale Of Two Albertsons
Barnes & Noble Will Have Only One Day To Let Borders' Loyalty Customers Opt Out
Borders CRM Data Still In Play