Official Depression - Starbucks To Sell Their Corporate Jet

Discussion in 'Wall St. News' started by THE-BEAKER, Jan 29, 2009.


    they had 3 apparently.

    sold one last year and one now so they still got one.

    i dont think these people get it.

    extort coffee from poor peasant farmers around the world for one cent a sack and then sell it to in debt westerners at £2.50.

    then fly around the world laughing their asses off.

    no wonder capitalism is finished with examples like this and citi bank.

    Jan. 28 (Bloomberg) -- Starbucks Corp., the world’s largest chain of coffee shops, said it will cut 6,700 jobs and close 300 more stores after reporting first-quarter profit that fell more than analysts estimated.

    The company plans to close 200 locations in the U.S. and 100 overseas, in addition to the 600 Starbucks said it would close last year. The workforce reduction will eliminate 6,000 café positions and 700 corporate jobs, the Seattle-based chain said today in a statement.

    Chief Executive Officer Howard Schultz warned in December that Starbucks’ profit would be less than analysts’ estimates at the time as sales in established stores worsened in November. Customers pinched by job losses and falling home prices are cutting back on premium coffee. The firings and closings announced today further accelerate Schultz’s plan to trim costs.

    Schultz also asked the board to cut his annual base pay to less than $10,000, or the minimum required to maintain benefits for him and his family, spokeswoman Deb Trevino said today in a telephone interview. His base pay was about $1.2 million in 2008. Starbucks is also selling a corporate jet, bringing the fleet to one plane following a similar sale late last year.

    “The only grown-up attitude and thing for them to do in this environment” is to adjust to the declining revenue, Sharon Zackfia, an analyst with William Blair & Co. in Chicago, said today in a Bloomberg Television interview. “You have to give this company credit for coming up with ways to bolster their margin even though same-store sales are down.”

    Trimming Expenses

    The additional measures increase the company’s plan to trim costs by $100 million this year, to at least $500 million, Starbucks said. Starbucks may save more next year as the store closings take effect, Chief Financial Officer Troy Alstead said on a conference call.

    Sales at U.S. stores open at least 13 months dropped 10 percent in the first quarter. The company had a total of 16,875 stores, including franchised locations, as of Dec. 28.

    “The pace of weakening in the business environment and the global economy has been accelerating,” Schultz said on the conference call today. “I’m far from pleased with our performance this quarter and I anticipate that our results could remain under pressure until the economy begins to recover.”

    Starbucks rose 50 cents to $9.65 today in Nasdaq Stock Market composite trading. The stock has lost 51 percent in the past 12 months.

    ‘Slow Drip’

    The coffee seller in July said it would close 600 company- operated stores in the U.S. and 61 shops in Australia. The move slashed 12,000 café positions, although about 70 percent of workers were able to transfer to nearby locations, resulting in about 3,600 jobs lost.

    Net income dropped 69 percent to $64.3 million, or 9 cents a share, from $208.1 million, or 28 cents, a year earlier, the company said in the statement. Sales fell 5.5 percent to $2.6 billion in the period ended Dec. 28.

    Excluding some restructuring costs, profit was 15 cents a share. The average of 16 analyst estimates compiled by Bloomberg was for profit of 17 cents a share on sales of $2.71 billion. The company doesn’t give quarterly forecasts.

    The store closings announced last year are still being implemented, and the shutterings announced today will be carried out through the year that ends in September, Starbucks said. Half of the corporate cuts announced today will come from Seattle.

    “I’m hoping 300 stores is enough, and that they’ve done what they need to do,” said Patty Edwards, a retail analyst with Storehouse Partners in Seattle. “Slow drip, even in coffee, isn’t necessarily the best thing. Sometimes you just need to get the pain over with.”

    To contact the reporter on this story: Courtney Dentch in New York at
  2. It'll officially be a "depression" when Boeing sells it's corporate jets. :cool:
  3. itsame


    Starbucks actually pays farmers pretty good prices for the coffee they bring over.

    You may not like corporate jets but they serve a good purpose. Just this week my boss and I were supposed to fly to go visit a site but the weather was bad and we had to drive.

    The day was a waste as far as productivity. If we would have flown I could have been in the office an extra 3 hours and gotten a ton of more work done. I'm not saying its right, but these things can make executives more productive which could increase profits.

    People who don't travel for business have no idea how much it sucks and how it can kill productivity
  4. Well, if the weather wasn't bad, you could have flown on a commercial jet.

    Why does it have to be a corporate private jet?

    Unless you're flying in the damn thing almost everyday and it's packed with employees, I don't see the cost advantage over commercial.
  5. Illum


    This Ceo is such a clown. He says anything to butter up his stocks. He prolly just bought those jets so he could sell and look great. This stock is trash, but he can sure pump it up. No bonus, jets. Does he really think he is a NY brokerage? How about 2 dollar coffee or calling "baristtttaas" what they are. Fast food workers. Whole thing is a sham and died the day the free credit died. No one pulls out a ten to pay for this junk. Its over. But yea again, he is good with retail investors and getting them to buy. King snake oil.
  6. A Recession is when CitiGroup has to give up their jet.

    A Depression is when you have to give up yours. :)
  7. You're spoiled being in Chicago. We can drive to the airport and be anywhere in the world in a few hours.

    When you have coffee shops in Mayberry, the nearest airport may be a couple hundred miles away. So you drive. Same problem, day wasted.
  8. Lucrum


    Some times they are used for executive boondoggles but for the most part these jets are very useful business tools and can make a company considerably more competitive.
  9. S2007S


    Wow who would have thought this could happen to this company that has ALWAYS sold overpriced coffee. I dont care how great your business model is, there is always going to be a time where your just not going to be on top of the world and today starbucks is finally realizing this after selling their corporate jet, closing stores and laying off thousands of people.

    Didnt they have any understanding about Saturating a market place, it should come as no surprise that $5 coffee is just too much for the average joe.
  10. mokwit


    Another fad that has had its day.

    I just never undrestood the attraction, please someone enlighten me as to the attraction of starbucks - the only selling point I can see is that for that price they will let you sit there for a long time.
    #10     Jan 29, 2009