Stumptown, the iconic and fiercely independent company that helped define coffee in this city, has been sold to a New York investment firm, according to records and interviews with industry officials.
A coffee industry executive has confirmed for WW that Stumptown's new investors claimed to have bought 90 percent of the Portland company. The sale ends the company's 12-year life as a local brand that pioneered high-end coffee here and around the world.
Stumptown, under its founder, Duane Sorenson, is renowned for purchasing the best coffee beans, cultivating an edgy image, and remaining free of corporate ties. It is the anti-Starbucks.
When rumors of a possible sale leaked out last week, Stumptown officials denied it. Sorenson made a rare statement to the media, saying a friend had simply invested in the company to help Stumptown grow. "I still own Stumptown," Sorenson told the New York Times. Stumptown spokesman Matt Lounsbury told The Oregonian that Sorenson "still owns the company."
The company is also reassuring its employees. At Stumptown's Ace Hotel cafe, manager Robyn Brems told WW that a company representative had visited each of the roaster's coffee shops to reassure them that the company had not been sold. "We're fine," Brems said. "Everything is fine. Stumptown has not been sold, and that's all we're supposed to say."
Over the weekend, however, Stumptown officials backed away from those denials after being questioned by WW. Lounsbury now declines to say whether or not Sorenson has sold a majority stake of the company to TSG Consumer Partners, an investment firm famous for buying small companies and then flipping them for a huge markup.
WW has made repeated requests to talk to Sorenson, but he has so far declined to call us back.
Reports about Stumptown's sale first surfaced May 31 when a blogger named Todd Carmichael wrote about it on Esquire.com. His blog post, titled "The End of Stumptown, America's Hippest Coffee Brand," was light on details. But in it he wrote: "Duane Sorenson, the founder of Stumptown, the Che Guevara of the rock-star barista movement, sold his life's work to the highest bidder."
Carmichael at first didn't disclose how he knew this information. That same day, WW posted public documents that supported his claims. Since then, Carmichael has opened up to WW, providing more details about what he was told by TSG officials about Stumptown.
Carmichael is the CEO and co-founder of a Philadelphia-based coffee company called La Colombe Torrefaction. He has told WW that he was approached by TSG officials on May 13 to see if he was interested in a partnership.
Carmichael said that Alexander Panos, a managing director with TSG, met him at his company offices and told him that TSG had already purchased Stumptown.
âAlex Panos looked me in the eye and said he purchased 90 percent of Stumptown from Duane [Sorenson] and planned to then fund a big expansion,â Carmichael told WW.
Panos didn't mention how much his firm paid for its stake in Stumptown.
Panos has not responded to calls from WW seeking an interview.
According to Carmichael, Panos said his firm hoped to merge Stumptown with other coffee companies. Panos proposed that La Colombe join in, Carmichael says. And he says Panos asked Carmichael if he might reach out to other specialty coffee companies, such as Chicago-based Intelligentsia, Blue Bottle, which is based in San Francisco; and Counter Culture, from Durham, North Carolina.
Carmichael said his company had one more meeting with TSG officials on May 18, and that because of a confidentially agreement, he could not discuss details. But it was clear to him that Stumptown was no longer locally owned and was under the control of TSG.
Carmichael also told WW he was not interested in merging or being part of a deal with TSG and Stumptown.
Public records suggest a change of control at Stumptown.
Stumptown was an Oregon corporation since its founding. But on April 11, a new company, called Stumptown Coffee Corp., was registered in Delaware, a state known for its business-friendly rules. Another company, TSG Coffee Holdings, LLC, was filed in a Delaware at the same time.
In Oregon, Stumptown Coffee Corp. filed papers (PDF) on April 28 to take control of the company name from the previous Oregon-based corporation, Stumptown, Inc. Those records show Panos as Stumptown's new authorized representative, with his address as TSG's New York headquarters.
Corporation records in California and Washington also show Stumptown's registration has moved to Delaware. Washington records now list Alex Panos of TSG as president, secretary, treasurer and director of Stumptown.
Oregon Liquor Control Commission records list TSG's Panos as Stumptown president. The OLCC filing is an application for Stumptown Coffee Corp. to take control of Stumptown's existing liquor license at its cafe at 128 SW 3rd Ave., between Pine and Ash streets.