Tully's Coffee

Inception

Tully's opened its first store in Kent, Washington in September 1992.

The founder of Tully's Coffee, Tom "Tully" O'Keefe, who retired from the company in 2010, planned to rival the quickly expanding Starbucks coffee. Tully's quickly developed into a strong regional specialty coffee retailer 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. Tully's focus was no longer on competing against Starbucks but on serving hand-crafted coffee in its local Seattle area retail coffee shops. The company had franchisees and grocery chain coffee shops in the U.S. and Asia.

It operated stores in the Greater Puget Sound area of Washington, California, Idaho, Arizona, Colorado, and licensed its brand for use in South Korea and Japan. It had also opened stores in Singapore, Metro Manila, Beijing and Stockholm, Sweden.

Tully's opened its first Japanese outlet in Ginza, Tokyo, in 1997. Tully's opened in Japan after a 33-year-old Sanwa Bank employee, Kota Matsuda, personally appealed to O'Keefe to open a chain of high-quality coffee shops in Japan. Matsuda became the CEO of Tully's Coffee Japan, a joint venture between Tully's, Matsuda and several outside investors. Unlike its rival Starbucks, which chose to run its stores in Japan directly, Tully's expanded in Japan through franchising. Tully's sold a portfolio of intellectual property to TCJ in August 2005 for over $13 million, and the Japanese tea maker Ito En acquired TCJ in 2006.

In August 2007, plans for an IPO were placed on hold by the company, citing a "volatile market." This decision was made right after the company was advised by its bankers to refrain from going forward with the IPO due to a tremendously declining stock market. The company pursued alternative sources of capital and sought all strategic investment or sale opportunities as a result. Fiscal 2006 losses amounted to $9.7 million.