Diedrich Coffee Chief Resigns

Diedrich Coffee Inc. said Steven A. Lupinacci resigned as president, chief executive, chief financial officer and a director of the coffee chain operator. The fast-growing Irvine-based coffee chain, which recently expanded into Colorado and Texas, also said it might close five poorly performing stores and record an estimated $1-million net loss for the fiscal year ended Jan. 29. Diedrich reported a $186,000 net profit during the previous year. Diedrich executives tied the yearly loss to slow sales of holiday merchandise at stores and through a company catalog, a rapid expansion program that strained operating systems and slower-than-expected revenue growth outside its Southern California stronghold. Director Lawrence Goelman was named interim president, and the chain has initiated a search for a new president and chief executive. Lupinacci was not available to comment on his departure. Diedrich, which grew to 36 locations from 12 in fiscal 1996, said yearly revenue will increase to $19 million from $10.2 million, largely on the strength of sales at new locations. Although four of the five stores that might be closed are out of state, Chief Operating Officer Kerry Coin said the company “remains firmly committed to expansion into new markets and continues to believe that prospects for growth are good.” On Tuesday, Diedrich’s shares fell $1.625 to close at $5.75 in Nasdaq trading. Trading was delayed Wednesday.