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Posted
Jul 18 2008, 01:15 PM
by
Kim Peterson
Rating:
There are some street corners in America where you can stand and see two, even three, Starbucks stores competing for your business. It was obvious that that kind of saturation wouldn't last. Starbucks has named the 600 stores it plans to close, and some customers are taking the news particularly hard. You can see the full list of closures by clicking here.
Investors seemed indifferent to the news, and Starbucks shares dropped by less than 1% to close at $14.34. (The stock has dropped 45% in the past year.) That's because the specific list of locations isn't that important. Investors are paying more attention to how the closures fit into Starbucks' larger plan to improve its financials and its share price.
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Posted
Jul 01 2008, 10:31 PM
by
Anthony Mirhaydari
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Finally, some good news from Starbucks: the coffee-shop behemoth is closing 600 stores and cutting 12,000 jobs, roughly 7% of its global workforce.
This is a gutsy move for founder Howard Schultz, who just recently retook the helm with broad pronouncements of returning to roots and reigniting the "emotional attachment with customers" that has been lost over time. After all, Starbucks now has 16,226 locations, up from just 1,886 over the last 10 years. With operations in such faraway lands as Lebanon, Kuwait, Saudi Arabia, Indonesia, Argentina, and Romania, Starbucks' expansionist future once seemed boundless.
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Posted
Jun 23 2008, 05:41 AM
by
Douglas McIntyre
Filed under: Citigroup, Sprint, Wal-Mart, Intel, AMD, AT&T, Starbucks, Target, Sears, IBM, Circuit City, Sun Microsystems
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With the trading year almost half over and results from the first quarter out, 24/7 Wall Street has created the latest installment of its Ten Worst Managed Companies In America list. This is a companion piece to the "CEO of the Year" list and "Large Companies that May Disappear" series.
This analysis is based on: 1) one-year and five-year stock performance relative to the major indexes and other companies in the industry, 2) the company's position in its industry both now and over the last five years, 3) whether management made identifiable and critical decisions which hurt the company, 4) a change in the company's relative market strength compared to its competition, and 5) whether the company could have identified mistakes and changed course quickly enough to avoid a catastrophe.
Some readers will think it is not fair to include companies which have had a recent
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Posted
Jun 03 2008, 11:18 AM
by
Kim Peterson
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Starbucks has finally called off the T-Mobile hounds and now offers two hours of free Wi-Fi a day to customers. Well, it's not completely free, but it's close. Here's how to get it: First, spend at least $5 on a reloadable Starbucks card, which you can get in stores. Then, go online and register for Starbucks' rewards card program. Then create an AT&T Wi-Fi account. You have to agree to let AT&T send you four spam "special offer" e-mails a year. You also have to use the Starbucks card once a month, which means you have to buy something at Starbucks once a month. Sounds like a bit of work, doesn't it? Starbucks shares are down 2% today to $17.57. Why the sudden burst of generosity?
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Posted
Apr 22 2008, 04:43 AM
by
Douglas McIntyre
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Once a year, the firm Millard Brown puts out its BrandZ 100 Most Valuable Brands. The data used for the list come from consumer research and financial data on the companies. The research house gives its methodology here.
For those who think Google is the top brand, give yourself a pat on the back. It has a brand valuation of $86 billion, up 30%. For those research mavens in the crowd, the figure makes absolutely no sense. Google has a market cap of $168 billion. Most of that would go away -- no matter how good the technology is -- if it changed it name to Dawdle.
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Posted
Apr 10 2008, 09:44 AM
by
Anthony Mirhaydari
Rating:
Pity Howard Shultz. Even after retaking the reins of his global latté-brewing behemoth, vowing to return the company to its roots and launching a six-point plan of attack, his Starbucks shares continue their sickening slide. With this week's launch of the new Pike Place Roast, he's now busily touting efforts to "reinvent brewed coffee across America." Unfortunately, brewed coffee isn’t exciting, and with a much lower-selling price than Starbucks' espresso-based drinks, its promotion will surely erode margins.
The other growth initiatives are similarly lackluster: New coffee machines, a customer rewards program, a stronger focus on environmental initiatives, and a dedicated web portal to accept new ideas from anyone who cares. The last smacks of desperation. So, being a native Seattleite, I feel obligated to offer a simple, four-point rescue plan:
1. Stop focusing exclusively on coffee: Yes, Starbucks needs to do everything it can to improve its image as a purveyor of premium coffee. The move towards pre-ground beans and automatic espresso makers left it vulnerable. This is especially true now that McDonald’s and others are offering vastly improved and in some cases superior coffee, mitigating the company’s claims to quality.
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Posted
Mar 30 2008, 05:26 PM
by
Douglas McIntyre
Rating:
Starbucks has been a disappointment recently. Same-store sales in the U.S. slowed over the last couple of quarters. The company pushed down its guidance. Founder Howard Schultz kicked out his CEO and took over.
In late 2006, Starbucks traded over $40. It is well below that now -- under $18 on most days.
Right as the stock peaked, then-CEO Jim Donald made the audacious statement that the company would eventually have 40,000 stores. On the day he said that Starbucks had 12,440 stores. Looking back, it is almost certain the his prediction had no chance of becoming a reality. But, the $40 share price had gone to his head. He had become delirious with success.
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Posted
Mar 21 2008, 11:20 AM
by
Anthony Mirhaydari
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Conventional wisdom says McDonald’s should continue to have great success as the economy slows and consumers trade down restaurants just as they’ve been trading down to Wal-Mart for their shopping needs. Sounds great, except that the company's insiders beg to differ: Over the last six months, nearly 760,000 shares worth some $43 million have been sold.
A significant amount by any measure, this works out to roughly a 20% liquidation of the insiders according to Thomson Financial. CEO James Skinner sold 35% of his stake. Gloria Santona, the general counsel, parted with more than half of her shares. Jose Armario, responsible for Canada and Latin America, traded away 80% of his holdings.
My guess is that they’re less than confident about the big McCafé push. Better drip coffee is one thing, and McDonald’s definitely has good drip coffee. But going head-to-head with Starbucks is another. Don’t kid yourself: McDonald’s will never be Starbucks -- and by the look of things it probably doesn’t want to be Starbucks anyway. There just isn’t any synergy between burgers, fries, and cappuccinos.
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Posted
Feb 11 2008, 01:23 PM
by
Kim Peterson
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AT&T gets another win today. Starbucks is ditching T-Mobile and going with AT&T for its customer Wi-Fi service at 7,000 locations.
People who have a Starbucks prepaid gift card can get two hours of free Wi-Fi per day at Starbucks. Glenn Fleishman confirms that you can buy and activate a card, and then get free Wi-Fi from that day forward. Most of AT&T's broadband and U-verse customers will also have free access, but AT&T wireless customers (including iPhone users) won't get the same deal. Surprisingly, the per-hour Wi-Fi fees will drop under AT&T to $4 for two hours or $20 per month for unlimited access. (T-Mobile used to charge $6 an hour).
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Posted
Feb 01 2008, 02:08 PM
by
Robert Walberg
Rating:
This weekend when you get up early, grab the newspaper and head over to Starbucks for some coffee and a breakfast sandwich, you better savor the flavor of the eggs and bacon, as management announced that it will be pulling its egg sandwiches from the menu. Apparently, management is under the impression that consumers aren't frequenting its stores as often as in the past because the odor from the eggs overpowers the aroma from the coffee, thereby destroying the whole Starbucks sensation.
Something stinks, but it's not the breakfast menu. Okay, so there is a faint smell of bacon and eggs from time to time, but so what. Are we really to believe that the average Starbucks consumers' sense of smell is so refined and/or delicate that they can't stand the odor wafting from the kitchen area while waiting a few minutes for their coffee? Seems to me people have been doing it for years at McDonalds, Dunkin Donuts, and the local diner. The two -- coffee and breakfast -- aren't incompatible. In fact, they seem to go together rather nicely.
Frankly, what I smell is a lot worse than eggs and bacon -- it's a management team trying to pull a fast one on investors. Traffic at Starbucks is down from the pace it enjoyed a couple of years ago, but that has less to do with the customer experience being scrambled by breakfast items and much more to do with ever higher coffee costs, a sluggish economy and increased competition. That's the three-headed monster depressing growth and until management starts to honestly address these problems, the stench coming out of Starbucks will be its quarterly financials.
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