Golden Corral Buys Stake in Coffee Chain
WILMINGTON, N.C.-- (NEWSOBSERVER.COM) -- January 12, 2006 -- Golden Corral is known for steak.
Its parent has taken an interest in beans -- the roasted kind.
Investment Management Corp. of Raleigh said Wednesday that it has bought 16 percent of Port City Java, the Wilmington coffee chain. Golden Corral founder James Maynard has taken a seat on the coffee company's board.
The investment firm sees big potential in the premium coffee business, and took a shine to Port City's regional brand.
" We had been looking for something in coffee, " said Richard Urquhart, vice president of finance at Investment Management. " We like their products. "
Port City Java executives hope the investors bring a golden touch. The chain wants big expansion and help standing out from the likes of Starbucks.
" We want to take the concept as big as we can, " said Don Reynolds, the founder of Port City Java. " To really ramp the company up and roll it out the way we want to, we really wanted to take some time and bring somebody in of this caliber. "
Under Maynard's direction, Golden Corral has grown from a single location in Fayetteville 32 years ago into a nationwide operation with about 500 restaurants. The chain has thrived while rivals such as Sizzler have declined.
Reynolds attributes the success to Maynard's understanding of customer needs and his ability to put together strong concepts and manage franchise relationships. Those are skills Port City needs.
" We're getting to the level where we're going to have to stop and reinvent the wheel, " Reynolds said. " How much nicer it is to have somebody who already has the wheel. "
Port City Java, born 10 years ago in North Carolina's port city, is growing rapidly. It has 52 stores -- up from 30 a year ago -- in 12 states and as far away as Indonesia and Saudi Arabia. The company owns 10 of the stores; the rest are franchises.
In the next six weeks, eight more franchises will open, including at Princeton University in New Jersey and N.C. State University, Reynolds said. But his ambitions are bigger.
The coffee industry is fragmented. National rivals such as Starbucks lock up prime locations in cities, and independent coffee shops dot the urban landscape. Chains such as Dunkin' Donuts and McDonald's also are trying to lure more customers with their java.
" To have a successful and national expansion, you really need a differentiated strategy, " said Kristine M. Koerber, who follows the coffee industry for JMP Securities in San Francisco.
Port City has gained customers in part through its focus on organic coffees. It has tapped into the same customer base that is fueling stores such as Whole Foods. Reynolds said Port City doesn't particularly want to kill the competition. It just wants to provide a different -- he calls it a superior -- experience.
Urquhart offered a similar view.
" We don't want to just have a very attractive small business, " he said. " We want to have a good strong, growing business. "
Charles Maready, an Investment Management employee, has joined Port City as vice president and treasurer to help facilitate that vision, Reynolds said. Among the firm's first chores will be helping Port City find a chief executive.
The relationships between the two companies are strong, officials with both companies said. But there are limits.
Don't expect to see Port City java on Golden Corral menus.
" Different concepts, different cultures, " Reynolds said.
About the Port City Java® Brand
Port City Java® is located in Wilmington, NC. The Company opened its first café in March 1995, in Wilmington, NC. The Company began Roasting in October 1995 and Franchising in September 2003. Port City Java® has created a specific identity by creating an " all day approach " to sales, through its café environment. For additional information regarding Port City Java®, please email us.
