The chairman of the company that owns Caribou and Peet’s coffee chains said the decision to close Caribou stores resulted from poor financial performance and weak brand recognition.
Bart Becht, chairman of Joh. A. Benckiser, said in an interview that the company, following a brand review, decided to focus the chain’s business where it was going well — in Minnesota. Caribou corporate headquarters is in Minneapolis.
“Outside of the region, the brand has always been relatively weak, and profitability of that business has been pretty much nonexistent,” he said, adding that his company decided to close 80 underperforming stores instead of all 168 company-operated locations. The remaining 88 locations will be converted to Peet’s Coffee & Tea shops in the next 12 to 18 months.
“We believe under Peet’s, they’ll do better,” Becht said. “But that still has to be proven.”
He added that because Peet’s and Caribou are such different brands, JAB has committed to maintaining two distinct management teams, “so we don’t start losing the character of the brands.”
Despite the closings, Becht said that he doesn’t expect to close additional Caribou locations as franchise agreements come up for renewal. He added that JAB’s goal for both companies, which have been acquired in the last year, is to build profitability and ultimately add locations.
Caribou will “continue to open stores in the Minnesota region, and potentially expand into other regions,” he said. “And Peet’s [should] continue to expand in the U.S., taking over and opening some of their own stores.”
Locations in Akron, Hudson and Solon will remain but the Belden Village and Macedonia locations closed. Local stores that are staying open are closing temporarily to convert to Peet’s in the next few months.
Becht also said JAB, which also owns cosmetics companies like Coty, is a “long-term investor,” looking to spend 15 or more years with businesses it acquires, unlike other firms that seek to buy and sell businesses in five years or less.