Shot of profits for Starbucks
STARBUCKS HAS turned around the fortunes of its Irish business, making a profit of €490,000 in the year to October 2011, compared with a loss of €3.3 million the previous year.
Accounts for Starbucks Coffee Company (Ireland) Ltd just filed at the Companies Registration Office show the coffee chain secured turnover of €15.4 million from its 17 company-owned stores in the Republic during the period, down from €16.2 million the year before.
It cut sales costs and administrative expenses, and reversed an earlier impairment on assets, helping it to a pretax profit of €525,000.
The company also earned royalties and licence fees of €990,000, up from €875,000 the previous year.
Starbucks improved its margins in the period, the accounts show, “in spite of continuing challenges to the economy”. The company relaunched its Frappuccino drinks in stores and supermarkets, and introduced new breakfast and lunch ranges during the period.
In March this year, Starbucks also announced it was making its coffee stronger in its British and Irish stores, adding an extra shot of espresso to tall- and venti-sized lattes, cappuccinos, mochas and caramel macchiatos.
Starbucks is expanding again in Ireland, having closed five stores in 2009. Following the opening of the Starbucks in the old Bewley’s building on Dublin’s Westmoreland Street on Tuesday, the company now has 26 stores in the Republic, compared to 22 a year ago.
Both the new Starbucks in the former Bewley’s and a cafe due to open shortly in Dundrum are among a number of Starbucks concessions operated under licence by brothers Colm and Ciarán Butler, who run the TGI Friday’s chain in Ireland.
While growth in the company’s Irish presence in recent times has been the result of this licensing arrangement, a spokesman for Starbucks said it would expand in Ireland via a mix of company-owned and licensed stores in the future. This mirrors its strategy in the UK, where part of its planned expansion is set to come from a licence agreement with petrol forecourt retailer Euro Garages.
Kris Engskov, who has been managing director for the US company’s operations in Britain and Ireland since September last year, described the Westmoreland Street store as “a great example of our confidence and commitment” to Ireland.
“It’s a great new design that sympathetically respects the heritage of a Dublin landmark,” Mr Engskov added.