Industry News | September 1, 2009

Starbucks Takes Back All French Stores

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Starbucks Coffee Company (NASDAQ:SBUX) announced today that its subsidiaries, Starbucks Coffee EMEA and Starbucks Coffee International Inc. have entered into an agreement with joint-venture partner, Sigla, S.A. (Grupo Vips) of Spain, to which Starbucks, through its subsidiaries, will assume 100 percent operating control of the Starbucks business in France, converting the market to a company-operated business.

As part of the transaction, which is expected to close on Sept. 30, 2009, Grupo Vips will be a fully licensed partner with exclusive rights to operate Starbucks coffeehouses within the territories of Spain and Portugal. Prior to the execution of this agreement, Starbucks and Grupo Vips each held 50 percent equity stakes in the operating entities in France, Spain and Portugal.

“Grupo Vips has always been, and will continue to be, a great business partner for us in Europe,” says Martin Coles, president of Starbucks Coffee International.

“Grupo Vips and their partners (employees) have established Starbucks as one of the most respected and recognized brands in France. We are excited to work with Grupo Vips in a new capacity as our strategic licensed partner in Spain and Portugal, as we continue to focus on operational excellence and customer experience in the region,” Coles continued.

This agreement positions both Starbucks and Grupo Vips to maximize operational efficiency and profitability while continuing to deliver an unparalleled customer experience in France, Spain and Portugal. The clarity of ownership also allows both companies to capitalize on the benefits of aligning their respective market’s business opportunities, operation and organization with their existing infrastructure.

“This is a great time for Starbucks to continue growing the business in France while we dedicate our resources, market expertise and attention to strengthening the Starbucks brand in Spain and Portugal, two markets where we will be able to leverage greater synergies with the rest of our Grupo Vips businesses in order to maximize the growth of the brand locally,” says Plácido Arango, president of Grupo Vips. “I am proud of the solid foundation we’ve built and the success we’ve achieved in France, which would not have been possible without the commitment of each partner to Starbucks Coffee France in the past five years,” he said.

“This agreement underscores Starbucks commitment to France and our belief in the long-term market’s potential,” says Philippe Sanchez, managing director of Starbucks Coffee France.

“I look forward to working closely with our partners to continue serving the local communities, deliver the Starbucks Experience and grow the market over time.”

The current leadership teams for France, Spain, and Portugal will remain in place as an integral part of the operation to ensure a seamless transition for customers, partners and other stakeholders. Customers and partners will continue to experience the same level of customer service, the same commitment to quality and ongoing dedication to the communities in which Starbucks operates, in all markets.

Starbucks has been a part of the communities in France since opening its first location at Paris Opera in January 2004. The company now operates more than 50 locations in and around Paris and Lyon, and employs approximately 800 partners. Together with Grupo Vips, Starbucks has also been delivering the Starbucks Experience in Spain and Portugal since 2002 and 2008 employing in both markets a total of 1,000 partners.