Tully's puts off IPO, cites market turmoil

Tully's Coffee, once eager to jump into the stock market's roiling waters, now waits nervously on the shore.

The Seattle-based coffee retailer has indefinitely postponed its initial public offering, citing turmoil in the stock market.

The company's IPO, aimed at raising about $34.5 million in net proceeds, had been expected to occur late last week or early this week.

"We made a decision with our bankers to postpone the pricing," said Tully's Chairman Tom O'Keefe. "Let's wait till things settle down in the markets."

O'Keefe, who founded the Seattle company in 1992, said it can't predict when it will renew its bid to go public.

"Obviously we want to go sooner rather than later," O'Keefe said. "It's all based on the health of the markets. ... When the timing's right, we'll know," O'Keefe said.

Tuesday, the markets didn't look too rosy. The Dow Jones Industrial average fell 1.57 percent to 13,028.92 points, nearly a thousand points below its early July high.

Tully's in late July kicked off a two-week road show to pitch its offering to investors. The IPO is underwritten by KeyBanc Capital Markets, D.A. Davidson and Stifel Nicolaus.

A Securities and Exchange Commission filing indicated Tully's plans to sell 3.5 million shares, or 39 percent of the company, at between $10 and $12 each.

If shares sell at midpoint of that price range, the company would get $34.5 million after costs, which would be used to repay debt, open new stores and meet other expenses.

Tully's, which operates 131 stores in five states, last month reported a first-quarter loss of $2.2 million, although sales in stores open at least a year rose 9.5 percent.

Fiscal 2006 losses amounted to $9.7 million.

Times business reporter Melissa Allison contributed to this story.

Ángel González: 206-515-5644 or agonzalez@seattletimes.com