Wake Up and Smell the Coffee

Borders Group Inc. (Ann Arbor, Mich.) has entered into a licensing agreement with Starbucks Corp. (Seattle) to operate Seattle’s Best Coffee cafes in more than 400 existing Borders locations in the continental United States and Alaska, as well as in new stores as they are opened. Borders will begin converting its in-store cafes to Seattle’s Best cafes early next year.

Seattle’s Best is a division of Starbucks.

The deal will put Starbucks-owned brands in the top two bookselling chains in the U.S., since Barnes & Noble (New York) has an existing pact to serve Starbucks-brand coffee in its in-store cafes.

Borders currently operates most of its in-store cafes, though a handful of cafes are licensed to outside companies, such as Karl Ehmer Inc. (Ridgewood, N.Y.), which owns Dean & Deluca, and Cosi Inc. (New York). Borders said stores with existing deals won’t convert to Seattle’s Best, but all new stores will carry the Seattle’s Best brand. The cafes will continue to be managed and staffed by Borders employees, who will be trained by Starbucks.