By
Leslie Patton & Sapna Maheshwari
March 15, 2013
Caribou Coffee Co. will no longer pursue
plans to open shops inside J.C. Penney Co. (JCP) stores, about six months after
Chief Executive Officer Ron Johnson cited the company as a potential partner.
The Minneapolis-based coffee seller won’t be
opening stores in J.C. Penney locations and “does not have plans to move
forward with a partnership at this time,” Caribou Chief Executive Officer Mike Tattersfield
said in an e-mailed statement today. Johnson discussed the cafes during a
September tour of a prototype store for analysts and investors. Tattersfield
declined to say why Caribou was pulling out.
The loss of the cafes comes as Johnson
struggles to transform most of J.C. Penney’s stores into collections of
boutiques peppered with eateries, or a kind of mall within a mall. The
department store chain reported an annual sales decline of 25 percent to $13
billion about two weeks ago. In September it said Caribou cafes would provide a
place for customers to relax and help the coffee company expand.
Daphne Avila, a spokeswoman for Plano,
Texas-based J.C. Penney, didn’t immediately return a voicemail and e-mail
seeking comment.
Caribou Coffee, acquired by Joh. A. Benckiser
Group earlier this year for about $340 million, has put locations in other
retail stores, including Jewel-Osco, the grocery chain that Supervalu Inc.
(SVU) agreed to sell to Cerberus Capital Management LP in January. Caribou also
has shops in Lunds and Byerly’s grocery stores in Minnesota and at Hy-Vee
markets in the Midwest.
Caribou had 610 coffee shops, including 202
franchised locations, as of Sept. 30. The chain has said it’s targeting 10
percent to 20 percent unit growth this year in cities including Washington and
Chicago.
J.C. Penney, which has 1,100 stores, gained
0.6 percent to $15.48 at the close in New York. The retailer has lost 21
percent this year, compared with a 9.4 percent advance for the Standard &
Poor’s 500 Index.
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To contact the
reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net;
Sapna Maheshwari in New York at sapnam@bloomberg.net
To contact the editor
responsible for this story: Robin Ajello at rajello@bloomberg.net
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Kim Bhasin
March 15,
2013
JCPenney
won't have Caribou Coffee
shops inside its stores, Leslie
Patton and Sapna Maheshwari at Bloomberg reported.
Caribou
CEO Mike Tattersfield told Bloomberg that his company “does not have plans
to move forward with a partnership at this time."
Why
didn't the partnership work out?
Tattersfield
declined to comment to Bloomberg, while JCPenney and Caribou didn't immediately
respond to our requests for comment.
But
a JCPenney insider with knowledge of the situation, who requested anonymity,
shed some light on what happened.
Back
in February, JCPenney announced internally that Caribou Coffee would not be
offered in stores, and that it was searching for a vendor that would
"offer more options in food and beverage," according to the insider.
"No
word yet on who will replace them," he added.
JCPenney
first talked about adding Caribou cafes in its stores back in September while
showing analysts and investors around a prototype store which included a
Caribou stand.
The
department store was planning to add coffee and juice bars in place of cash
registers, which are being eliminated entirely in favor of mobile and self
checkout.