Monday, June 20, 2011

Closure of Starbucks outlets pushes 2010 losses to €3.3m


STARBUCKS LOSSES in Ireland moved from tall to grande size last year due to costs associated with the closure of six company-owned outlets.

Latest accounts for Starbucks Coffee Company (Ireland) Ltd show its pre-tax losses doubled to €3.28 million in the 53 weeks to the end of October 3rd, 2010.

Revenues at the Seattle-based coffee brand, which opened here in 2005, fell by 10 per cent last year to €16.1 million.

Its cost of sales and administrative expenses remained the same as in 2009, with the result that its operating loss rose to €2.88 million last year from €1.2 million in the previous 12 months.

The coffee giant booked a loss on the disposal of fixed assets of €117,389 and incurred interest charges of €286,806, to leave it with a loss for the year of €3.28 million for the year.

Starbucks's Irish subsidiary had accumulated losses of €12.5 million at last October and a shareholders' deficit of €8.3 million.

The accounts show the Irish company paid royalties and licence fees of €875,303 last year to its Seattle-based parent. This was down from €1.14 million in 2009.

Its employee figure fell to 234 from 280, with staff costs down from €6.1 million to €5.2 million.

The directors' report states that the company introduced Aviva health insurance policies for staff during the period.

It was also "able to redeploy 90 per cent" of staff who were at risk of redundancy from its decision to cut the number of company-owned outlets from 23 to 17.

Starbucks' Irish subsidiary owed just under €11 million to other companies within the group.

A note to the financial statements says Starbucks has told its Irish subsidiary it will not seek repayment of the intercompany loans before May 20th, 2012.

It also plans to continue to support the Irish subsidiary as a going concern over this period.

The first Starbucks store opened in Seattle in 1971 and the Starbucks corporation was established in 1985. It has 16,858 stores worldwide employing 137,000 and last year had revenues of $10.7 billion (€7.4 billion).

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