Teavana Holdings hopes its customers become steeped in its tea stores. Through some 250 company-owned retail stores, Teavana Holdings sells gourmet loose-leaf teas, including white, green, and black teas imported from Asia and other regions, as well as hand-crafted teapots and other teaware. Its stores, located in malls and upscale shopping centers in 34 states, are imbued with a healthy-living "Eastern" ambience and provide an interactive environment designed to cater to tea enthusiasts. While it does most of its business in the US, the company also has a presence in Canada and Mexico. Founded in 1997 by Andrew Mack and his wife Nancy, Teavana is a wholly-owned subsidiary of coffee-giant Starbucks.
Change in Company Type
Teavana was acquired by Starbucks for $620 million in cash in late 2012. The sale closed less than two years after the tea chain went public in mid-2011 with an IPO valued at about $121 million. Teavana went public during a time of significant growth for the company.
Between 2006 and 2012, Teavana's retail store locations grew from 47 to 250. Similarly, its revenues and profits increased during that time, due in large part to its retail store expansion and increasing sales at existing stores. The company's bottom line has also benefited from an uptick in sales through its e-commerce site. Other efforts that have bolstered profits include a long-term plan to reduce its stock of tea merchandise while increasing its selection of teas, as sales from teas inherently have a higher profit margin than more expensive, hand-made merchandise.
As part of its growth strategy, Teavana plans to continue aggressive store expansion and hopes to increase the number to some 500 stores by 2015. This has included expansion into new markets in the US and Mexico by opening both company-owned and franchised locations. In 2012 Teavana has its eye on a Canadian expansion. To this end, it acquired mall-based specialty tea retailer Teaopia for about $27 million in cash. Founded in 2005, Teaopia retails loose-leaf teas, tea related merchandise, and beverages through about 45 company-owned stores.
In addition to its retail operations, Teavana supports its network of stores though a handful of facilities, including a support center in Atlanta and a distribution warehouse in Stratford, Connecticut. The company sources its teas to more than 100 international and domestic vendors. – less