2nd half of year will be better than 1st half Recent announcement of Starbucks, one of many positive things, future profitable growth in 2013
Restructuring management is about done, team in place, goals established – started process of meaningful change – design phase of cupcakes, visuals all done for Fall
Supply chain management…visibility into historical level of sales..date warehouse largely built..going back 2 years+..demand can be forecast much better..helping stores and bakers…dynamic inventory being created..going to centralize entire purchasing function for stores..maximizing sales, minimizing waste – maximizing supply and demand
Real estate strategy…high traffic locations…significant opportunity by closing underperforming stores..3 in Chicago…and opening in malls…statistically very high chance of success in malls. favorable lease agreements in prime real estate going to open more stores more quickly..and upscale kiosks..for brand recognition and ROI is “Extraordinary”
In 2013, “IF FINANCING IS NOT ON ACCEPTABLE TERMS, WE WILL DELAY, SCALE BACK OR MODIFY OUR STRATEGIC GROWTH PLAN”
Customers will know about Starbucks in stores before it is there, they will know about transition to Starbucks coffee…WILL BECOME VIRAL
Mall stores and kiosks much cheaper than leasing stores on streets
Mall planned stores much cheaper and 11 new mall stores rank among the top half of performing stores…strong contributors
Original sec statement cost of stores be true? Answer: advised investors to disregard information, because new management and now stores much cheaper to open. Disregard the statistical information obtained in those documents.
Coffee will be served in starbucks cups,…brewing equipment? Loaned to CRMB and CRMB buys espresso machines…existing stores already have espresso machines.. NO SIGNIFICANT CAPEX TO IMPLEMENT STARBUCKS STRATEGY
“WE BUY THE COFFEE AND WE SELL IT”
STARBUCKS HAS NO TAKE ON THE % OF REVENUE!!!
“Every cup of coffee or espresso we sell we will make more money!!!”
Mall agreements: base rent, and then % rent after passing certain hurdles
Depth of assortment will be like a starbucks stores, 4 different coffees that are brewed, all the espressos (exception of frapacino) otherwise it is a complete offering
3 chicago stores closing could happen, see how it develops
Waiting to see operating improvements, what will you look for in initial stores before financing happens/dilution?
The 1st mall stores, open this week, then opening sequentially, signed some leases, being prudent, excited about store openings
Extensive market research has been done…thousands of respondents, survey and internet, indicate propensity to shop on regular basis at a store of ours at the mall ISN’T VERY HIGH, IT’S EXTRADORINALY HIGH…size of samples so significant, take the great locations with excellent metrics in the mall, take the opportunities as they exist