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(AP) - Chief Executive Michael Coles stepped down as
head of Caribou Coffee Monday after nearly five years as head of
the company that expanded from 207 stores to 473 stores during his
tenure.

      Caribou's stock began trading at $15.51 a share in 2005 and has
since lost two-thirds of its value, closing Monday at $5.15.

      Rosalyn T. Mallet, president and chief operating officer, will
take over as interim CEO and board member Gary A. Graves was named
non-executive chairman of the board. The company said Coles,
formerly president, CEO and board chairman, will remain a board
member.

      Caribou planned a conference call with stock analysts Tuesday
morning to discuss the change.

      Coles has been commuting to Caribou's Brooklyn Center
headquarters from his home in Atlanta. He issued a statement saying
it was "time to step aside and let a new CEO take the company
through its next phase of growth."

      During his tenure, Caribou extended its brand with
coffee-flavored breakfast bars made by General Mills,
coffee-flavored ice cream from Kemps and this year the pilot launch
of a coffee-flavored ice drink made by Coca-Cola.

      But profits haven't followed the growth. For this year, the
average analyst estimate calls for Caribou to lose $1.01 per share.

In 2008, the company is projected to lose 63 cents per share. While
market leader Starbucks has an operating margin of 10 percent,
Caribou's is now negative 4 percent.


      "There was a lot of top-line related expansion that came under
his leadership, but the market is still waiting to see the
profitability from that," said David Tarantino, an analyst at
Robert W. Baird & Co.

      At least 25 underperforming stores were closed this year and the
company moved toward more licensing and franchising. But Tarantino
said those steps came too slowly.


      Mallet, the new interim CEO, joined Caribou this year. She has
30 years of experience at food and hospitality companies, including
a previous job as senior vice president for Carlson Companies.

      Caribou was founded in 1992 by John and Kim Puckett, who sold
the company in 2001 to Crescent Capital Investments, a private
equity firm based in Atlanta. 

Caribou is the nation's
second-largest specialty coffee company behind Starbucks. Caribou
employs more than 5,000 people in 18 states and the District of
Columbia.
      

Gallery

Caribou Coffee's CEO on leadership

Business and Economic News

During the nearly five years Coles has headed the Minneapolis-based company, it expanded from 207 stores to 473 stores. But the stock has lost two-thirds of its value since it began
trading in 2005.

Caribou Coffee CEO Michael Coles steps down

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