$19m Mojo sale precedes US push
It was his baby but ‘‘babies grow up’’, says Steve Gianoutsos, the co-founder of coffee chain Mojo. Gianoutsos and his wife Julie started Mojo in Wellington 15 years ago. Today it has 36 cafes, most of them in the capital or Auckland, four under licence in Japan, two with a partner in China, and a United States one the couple run in Chicago.
Now another Kiwi-registered coffee company, Cooks Global Foods, is poised to buy Mojo for
$19 million in cash, Cooks shares and debt.
Back in Wellington to brief staff, Gianoutsos said he was happy for the company and its shareholders that Cooks was going to help it realise its grand plan of conquering the US.
Gianoutsos grew up in hospitality but did not have much of a background in coffee before opening his first cafe, Espresso Republic, in Wellington in the early 2000s.
And when it came to roasting coffee – one of Mojo’s strengths – he was a complete newbie.
‘‘I ordered a coffee roaster – that was the first phone call. I rang the bank manager to get the funding for that, and the third phone call was to my wife to say, ‘Hey, I’ve just bought a roaster.’
‘‘She said, ‘But you don’t know how to roast coffee.’
‘‘And I said, ‘That’s OK, I’ve got six weeks and a book.’ ’’
Mojo was started soon afterwards. The brand has always been company owned, while Cooks holds the franchise rights for the Esquire coffee chain outside New Zealand and Australia.
Acquiring Mojo would give Cooks cafes in its home country and immediately lift its earnings. The companies also have a shared vision for expansion in the US.
Gianoutsos says he would be disappointed if Mojo didn’t have
30 stores in Chicago within the next seven years.
He chose Chicago over New York, after realising the Big Apple’s real estate could sink the brand. He and his wife felt comfortable with Chicago’s geography which, like Wellington, was pressed up against water, albeit a lake rather than a harbour.
Despite plenty of coffee being available there, Gianoutsos says ‘‘craft coffee’’ – coffee as Kiwis and Australians like to drink it – is still hard to find in the US. ‘‘It’s easy for us to stand out.’’
The deal with Cooks is conditional and Cooks will have to raise capital. It’s majority owned by two Chinese corporations, Jiajiayue Holding Group and Yunnan Metropolitan Construction Investment Group.
But if it goes ahead, Cooks would have 142 cafes around the world under its umbrella.
The acquisition, ‘‘coupled with Cooks’ well-signalled plan to move to the NZX main board, have the potential to increase our market liquidity and broaden the company’s investor base’’, Cooks executive chairman Keith Jackson said.
The plan includes the retention of all Mojo’s staff and Gianoutsos, who would lead the push into the US. It would be nice for shareholders, who were all family, friends, managers and original store operators get some payback for all their hard work, Gianoutsos said.
And for Mojo, it was entering the next stage in its life.
‘‘It’s not a sail into the sunset and retire to an island in the South Pacific [situation]. We’re not done. I’m not done,’’ he said.
‘‘We’ve got a lot of work to do and . . . yes, this is my baby, but babies grow up and become teenagers and have their own aspirations and companies are like that.’’