'McDreamy' Beats Starbucks for Coffee Chain Rights

(AP) ‘McDreamy’ says he beat Starbucks for coffee chain
By DONNA BLANKINSHIP and CANDICE CHOI
Associated Press
SEATTLE

The actor, who was dubbed “McDreamy” as a star of the hospital drama while his co-star was called “McSteamy,” may soon be serving hot, steaming cups of Joe.

Dempsey won a bankruptcy auction to buy Tully’s Coffee, a small coffee chain based in Seattle. Among those he beat out is Tully’s much bigger Seattle neighbor, Starbucks Corp., which is known for its ubiquitous white cups with a circular green mermaid logo.

Dempsey, whose company Global Baristas LLC plans to keep the Tully’s name, declared victory on the social media site Twitter: “We met the green monster, looked her in the eye, and…SHE BLINKED! We got it! Thank you Seattle!

The win for Dempsey deals a rare setback for Starbucks on its home turf. Starbucks has long been both praised for bringing “coffeehouse culture” to the U.S. and criticized for crushing smaller chains. The coffee giant, which had planned to convert the Tully’s cafes to its own brand, last month announced plans to expand its global footprint to 20,000 cafes over the next two years, up from the current 18,000.

Dempsey said in an interview on Friday that as the underdog in Seattle, Tully’s will need to find its identity.

But in a statement shortly after the auction on Thursday, Starbucks insinuated that Dempsey shouldn’t celebrate just yet.

Starbucks, which wanted to convert the Tully’s cafes to its own brand, said that a final determination on the winning bid won’t be made until a court hearing on Jan. 11. Starbucks said it’s in a “back-up” position” to buy 25 of the 47 Tully’s cafes, with another undisclosed bidder making an offer for the remainder.

The combined bids of Starbucks and the undisclosed bidder come to $10.6 million, above the $9.2 million Dempsey’s company is offering to pay through his company, which was formed in order to purchase Tully’s. The other investors in Global Baristas aren’t being disclosed.

Tully’s Coffee, which is known for serving Joe with a milder taste than Starbucks brand, filed for Chapter 11 bankruptcy protection in October, citing lease obligations and underperforming stores. Tully’s wholesale business, which includes Tully’s Coffee in bags and single serve K-cup packs that are sold in supermarkets and other stores, is owned separately by Green Mountain Coffee Roasters Inc.

TC Global Inc., the parent company of Tully’s, said in a release Friday that it was “encouraged and excited” about Dempsey’s commitment to the chain.

Tully’s President and CEO Scott Pearson called the deal a “great match” and that the goal is to make sure creditors get paid and to keep as many people employed as possible.

Dempsey said he planned to be very involved in the running of the company, adding that the immediate challenges were to address bookkeeping issues, staff morale and sprucing up the coffee shops. Once the business is stabilized, Dempsey said the long-term goal would be to take the chain national.

Although Dempsey lives in Los Angeles, he plans to spend more time in Seattle, the city where “Grey’s Anatomy” is set in. Dempsey said he believed there is room in the city for Tully’s and the much larger Starbucks; he noted there might be people who are rooting for the underdog.

Dempsey made an appearance Friday morning at a Tully’s near Pike Place Market, shaking hands with workers and greeting customers before visiting other stores. Several dozen people, mostly women, came into the store.

Patrease Estelle, 45, works nearby, and came in with a small group from her office.

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Blankinship reported from Seattle and Choi from New York.