August 13, 2004 Ann Arbor-based Borders Group Inc., the nation's second-largest bookseller, will replace its in-store cafes with Seattle's Best Coffee shops at the company's more than 400 locations under a licensing agreement with Starbucks Corp. Financial terms weren't disclosed. The company will use the Seattle's Best name, menu and coffee as it starts converting its bookstore coffee shops to the Seattle's Best name early next year, said Anne Roman, spokeswoman for Borders. "Enjoying a great cup of coffee is an important part of the shopping experience at Borders and is one reason our customers spend more time with us," Vin Altruda, president of Borders Stores Worldwide, said. "With the conversion to SBC cafes, Borders is improving on what is already a compelling distinction in our stores. Seattle's Best Coffee brings tremendous specialty coffee expertise and a strong brand to complement what we do best, which is deliver a superior shopping experience for book, music and movie lovers." The SBC cafes will serve their full line of coffee and non-coffee beverages, including lattes, mochas and the JavaKula, SBC's signature blended beverage line. In addition, the cafes will offer a fresh food menu featuring bakery items as well as sandwiches. Borders, second only to Barnes & Noble in size, looks to boost sales at existing stores by giving more space to faster-selling items such as DVDs and stationery. Starbucks bought Seattle's Best from AFC Enterprises Inc. last year for $72 million. Borders employees will manage and staff the cafes as part of the licensing deal, the first for Seattle's Best, Roman said. "The Seattle's Best Coffee brand and customer base is a strong match with the Borders brand," Jim Donald, Starbucks president in North America, said in the news release. "Together, we look forward to enhancing the cafe experience by providing customers with a place to relax with music or a great book over a smooth cup of coffee. We believe that Seattle's Best Coffee is a quality brand with strong potential for growth and this agreement with Borders demonstrates our commitment to elevating its profile." An existing agreement with Starbucks to license and operate cafes within Borders' British stores will remain, Roman said. Shares of Borders fell 52 cents, or 2.4 percent, on light trading volume to $21.44 on the New York Stock Exchange. Seattle-based Starbucks fell 87 cents to $43.73 on the Nasdaq stock market.
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