Starbucks buys SF La boulange Chain bakery for $ 100 Million to improve food quality
NEW YORK – Starbucks Corp. will expand the food business by purchasing a small bakery network worth U.S. $ 100 million.
Network-based coffee shop in Seattle that states the product of La Boulange will be offered at Starbucks early next year, ranging from the iconic French pastry like croissants. Starbucks also said it plans to bring the San Francisco bakery in other areas in America – in the next three years. “We’ll take one store at a time, starting in metropolitan areas in the United States, where there is demand,” said Cliff Burrows President of Starbucks U.S., as quoted by The Post and Courier, Tuesday, June 5, 2012.
Now, says Burrows, the main purpose of the agreement is to meet customer expectations in terms of food quality.
Food has become an important part of Starbucks revenue in recent years, with average yields of U.S. $ 1.5 billion a year. About a third of purchases in the U.S. Starbucks locations including food. La Boulange, which also offers salads and sandwiches, has 19 locations in the Bay Area. Starbucks is in the restaurant industry segments that are growing are now dominated by Panera Bread Co.
Panera offers fresh-baked bread, sandwiches, and salad with a slightly higher price than other fast food restaurant. Bakery based in St. This Louis has 1,500 locations. More than a thousand locations of which have been established since five years ago. Panera sales grew 73 percent in that period.
By acquired La Boulange, Starbucks hopes to popularize French bread with experience in the United States, in the same way, by bringing the Italian espresso bar experience to the customer.
“After more than 40 years, we will be able to say that we are also sellers of bread,” says CEO Schultz Howars. The acquisition of Bay Bread LLC, the parent company of La Boulange, is expected to occur in the fourth quarter and Starbucks can generate revenue by 2 cents per share in the second half of fiscal year.
For the full year, Starbucks expects its net profit per share to be approximately U.S. $ 1.81 and U.S. $ 1.84. Starbucks faces increasing competition among fast-food restaurant chain serving coffee. Companies seek to increase profits by integrating the expansion of the product, such as ice cream.
In the holiday season, Starbucks plans to sell the coffee maker called Verismo, which allows people to drink lattes and other drinks at home. Outside the iconic cafe, the company also plans to open a juice shop Fresh Inc Evolution. Starbucks shares rose $ 1.75, or 3.4 percent, close to U.S. $ 53.9. Their stock fell U.S. $ 1.40, or 2.6 percent after-hours trading after the announcement of the deal with La Boulange.
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