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DIEDRICH COMES HOME

Diedrich Coffee’s namesake brand has 26 cafés in Southern California and is planning to open four new ones this fiscal year and 10 more next year, mostly in markets it has already entered, says CEO Rocky Laverty. “Our strategy is to be true to our local roots,” he said. That entails offering quality goodies such as hand-shaved chocolate — things a mass marketer cannot manage easily, he says. Diedrich also operates the Gloria Jean’s chain, a franchise-based mall presence for decades. Gloria Jean’s has 146 franchised stores. Laverty wants 14 more this year and 25 next year.

This winter Diedrich sold franchising rights to 316 Gloria Jean’s stores in Australia and other countries outside the U.S. to an Australian franchisee for $16 million. The money is being used to renovate U.S. stores and to help focus on domestic growth, says Laverty.

Stateside, Gloria Jean’s is undergoing an overhaul. Some of its stores “looked ratty,” he says. Diedrich opened the first of the new Gloria Jean’s prototype a year ago at Simon Property Group’s The Shops at Mission Viejo (Calif.). The furniture has changed (leather sofas and granite countertops now), as have the fixtures, the flooring and especially the merchandising, in a shift from a giftware to a café environment — with food and an enormous selection of tea.

“It’s completely different,” said Patsy Sanquist, the center’s area marketing director. Gloria Jean’s, with about 1,100 square feet, is one of the center’s original tenants, dating to 1979.

There have been changes to the menu, too, including the addition of children’s decaffeinated cocoa drinks.

Sales have perked up considerably, Sanquist says.

Leasing contact: Matt McGuinness, executive vice president of development, (949) 260-1600, ext. 673

— MA