admin Starbucks Corp is exploring a sale of its UK operations as it faces tough competition from newer operators, The Times reported on Saturday citing sources. Houlihan Lokey has been asked by Starbucks Co to assess interest for its UK operations, the Times reported on Saturday.
The coffee chain is in the process of evaluating strategic options for its international operations owned by the company, the newspaper reported. They have not, however, specified how the information was obtained.
A spokesperson from Starbucks told Bloomberg it “is not in a formal sale process for the company’s UK business.”
The UK is the largest market for Starbucks in Europe, the Middle East and Africa. As of last year, it had 1,000 stores in Britain, with 297 company-owned and 703 run by licensees. This was stated by the company in a financial report for the fiscal year ending in October 2021. The company suspended its assistance for the fiscal year in its last quarter earnings report after missing Wall Street targets due to China’s tough COVID-19 curbs which caused a significant impact on their sales in the country.
The total revenue was a whopping £328 million ($389 million) for the fiscal year. Out of this, the Starbucks UK Coffee had repaid in full a £25 million loan from its parent company that it had acquired to offset losses from reduced sales caused during the first months of the coronavirus pandemic, it said.
While the coffee chain experienced a jump in the form of a rebound in revenue after the Covid-19 lockdowns were eased in the UK, it said the financial performance of company owned stores had not recovered to the levels that were there pre pandemic. Office, travel and inner-city stores had lagged other locations. Starbucks opened 14 new company stores during fiscal year 2021 and closed five, it said.
In the earlier months of this year, Allegra Group, a market researcher, claomed that coffee chains in the UK will take at least four years to recover from the Covid slump. The company which has been dealing with recent unionization efforts of its U.S. workforce is looking for a permanent successor meanwhile Howard Schultz remains the interim CEO
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