Starbucks' German Brew

Starbucks wants to stay in Germany because that country " has the potential to be one of the biggest markets for us in Europe," according to Julio Gutierrez, president of Starbucks Coffee Europe. Starbucks plans to expand in Germany, and owning the German venture "allows us greater influence over the brand in Germany," Gutierrez says.

Although KarstadtQuelle wants to exit the business of owning and operating coffee stores, it wants to keep Starbucks coffee houses in its department stores, according to Christoph Achenbach, chairman of KarstadtQuelle, which is Europe's largest department store and mail order group with annual sales of 15.3 billion Euros. Achenbach says the company wants to refocus on its core department store business, which it recently announced plans to restructure.

Terms of Starbucks' cash purchase, which is expected to close by the end of November, were not disclosed. The German operations will become part of aworldwide Starbucks Corp. operation that includes more than 8,700 retail locations in North America, Latin America, Europe, the Middle East and the Pacific Rim. The acquisition of the German partner comes less than two weeks after Starbucks announced record fourth quarter and fiscal 2004 results of $5.3 billion in revenue (a 30% increase) and $392 million in net profit (a 46% increase and outlined ambitious expansion plans for the coming year. The Company expects to open approximately 1,500 new stores on a global basis in fiscal 2005. That will include 550 company-operated locations and 525 licensed locations in the US, along with approximately 100 company-operated and 325 licensed stores internationally.