The private equity takeover of Philz Coffee is going about exactly like you expect it would. Which is to say, it’s going great. Why? What have you heard?
In August of last year it was announced that an LA-based private equity firm would be buying the Bay Area-based coffee chain for a cool $145 million, giving payouts and bonuses to the co-founders, CEO, and other investment firm representatives while canceling all the common stock—the stock employees had been encouraged to buy during and after their tenure with the company—rendering it effectively worthless. Is that bad?
And now, to further anchor Philz ideals and brand resilience post-sale, the company’s new ownership has made the decision to remove pride flags from all Philz locations. This particular piece of corporate strategic brilliance hasn’t been all that well received.
As reported by SF Gate, the move to take down the flags is to promote more inclusivity, if you can believe it. “We are working toward creating a more consistent, inclusive experience across all our stores, including removing a variety of flags and other décor,” CEO Mahesh Sadarangani tells SF Gate. “This is a change in how our stores look, not in who we are.” Sadarangani goes also states that Philz is still planning on holding a Pride event in June, so their “longstanding support of the LGBTQIA+ community is unchanged.”
The response to the new policy thus far hasn’t been positive. A Change.org petition has been created to urge the company to reconsider their stance, and in the week since its creation has garnered nearly 6,500 signatures. “Philz Coffee’s recent decision to remove pride flags from their stores has left many team members and customers feeling confounded and unsupported,” the petition states. “Within Philz’s expressed core values, the company emphasizes its goal to create a ‘customer and team-member focused’ experience. The pride flags within the stores hold deep meaning and value to both staff and visitors, symbolizing that these locations are safe and welcoming spaces for all individuals, regardless of sexual orientation or gender identity.”
Petition signers note that “the LGBTQ community is core to the identity of Philz” and that the company has “made their branding and fortune off of supporting” them. Others on Reddit state that the new “consistent experience” Philz is after makes the cafes “[feel] like a McDonalds.”
And thus the removal of the unseemly soul of a once-beloved coffee chain is nearing completion so that the brand can be more easily digested into the corporate borg. Perhaps the new look will better facilitate a steamlined cross-promotional synergy between fellow Freeman Spogli & Co. brands, mandatory Arhaus furnishings and Sur la Table-branded wares, etc. Maybe they’ll put a Philz inside a Mattress Giant or a Batteries Plus, or vice versa. Now that’s synergy.
Zac Cadwalader is the managing editor at Sprudge Media Network and a staff writer based in Dallas. Read more Zac Cadwalader on Sprudge.
Top image via Philz
