Starbucks posts loss of €769,438

The first accounts for global coffee chain Starbucks in Ireland show a pretax loss of €769,438, although the company said sales in the Republic had exceeded all expectations.

Starbucks's Irish subsidiary was incorporated in February 2005 and the accounts run from then until October 2005. During this time, it had a turnover of €239,131. The company operated its Dundrum Town Centre store during this period. Based on its opening date of August 18th, this meant the store pulled in revenue of €239,131 in 44 days.

If this was annualised, each Starbucks outlet would be capable of generating €2.1 million revenue per annum. The accounts state that the losses were heavily influenced by the costs of setting up the company.

The accounts deal with the issue of funding the business in the period ahead. "Since the period end, the company has raised additional finance from its parent company consisting of a direct cash investment of €1 million. The company also has an agreement in place with its parent company which enables it to access finance if required."

The directors are recorded as expressing their satisfaction with the funding in place. "The directors consider it appropriate for the financial statements to be prepared on a going concern basis."

The money made available by the Starbucks parent, Starbucks Europe Middle East and Asia, was non-refundable and unsecured. The parent company is incorporated in the Netherlands. Its ultimate parent is Starbucks Corporation, based in Seattle, Washington.

The accounts disclose that rent and leasing costs during the period were €86,079. Starbucks has so far decided against basing stores in high-rent locations such as Grafton Street.

The chain has come under fire since arriving in Ireland for its prices and its effect on local independent coffee stores. However, the accounts say the company wants to conduct its business in a positive way. It mentions the chain's links with the National Adult Literacy Agency.

Starbucks yesterday declined to comment in detail on the results but a statement said its expectations for Ireland had been exceeded.

"We now have five stores in Ireland including Dundrum Shopping Centre, College Green, Harcourt Street, Blanchardstown shopping centre and Liffey Valley shopping centre. We are very pleased with progress so far and we plan to continue our expansion in Ireland," it said.

"However, we do not disclose future store count targets."