Burnt Starbucks: Shares Slide After Bakery Buy |
| Forbes - Jun 5, 2012 |
Starbucks is moving to expand its food offerings with a $100 million acquisition of Bay Bread and its La Boulange bakery brand, known for French pastries and breads made in its own facilities. The move, announced Monday, drew an unenthusiastic response from the market Tuesday with shares of the chain falling nearly 4%.
While food may not be what Starbucks is known for, the company’s Chairman and Chief Executive Howard Schultz called the deal “an investment in our core business.” Starbucks’ revenue from food offerings have grown double digits in each of the last two years and now account for $1.5 billion company-run U.S. stores.
Even with that impressive growth rate, UBS analyst David Palmer notes that “only one-third of Starbucks’ orders include food,” so if the quality and taste of La Boulange branded baked goods can increase that ratio all the better for the chain.
Read Full Article from Forbes
- Posted: 2012-06-05 10:49:01
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