Exclusive Starbucks Sells German Branches to Polish License Partner AmRest

U.S. coffee company Starbucks will sell its 144 branches in Germany to a license partner, AmRest, for €41 million ($46.5 million), hoping that the new owner can do a better job of increasing Starbucks’ presence in Europe’s largest economy. Starbucks Coffee Company, which faces many local rivals in Germany, has looked at different options to grow in the country since entering it in 2002, ranging from partnering with German department store Karstadt, which later went bankrupt, to opening branches in city centers where property prices were high. The coffee chain posted a loss of €6.8 million in the 2013/14 fiscal year in Germany. “We’ve built an impressive business in Germany over the past 14 years .. . but we know Germany could be a much bigger market for us and we have ambitious growth plans to be where our customers live, work and travel,” said Kris Engskov, president of Starbucks in Europe, Middle East and Africa in a statement. Starbucks said the partnership would begin in late May of 2016, giving AmRest the license to operate all existing stores and expand further in the country. The majority of Starbucks coffee outlets in the EMEA region are already licensed-owned and operated, the company said. Germany is Starbucks’ largest market in continental Europe with a total of 158 branches, which compete with national or regional chains such as Coffee Fellows, Balzac Coffee, Caras and Einstein Kaffee. There are more than 23,000 Starbucks stores globally. In addition to the 144 stores it owns and operates itself in Germany, the U.S. company has 14 German stores operated by license partners New Vision, SSP Germany and Marche. Starbucks already has a license agreement with Poland-based AmRest, which operates Starbucks branches in several eastern European countries. The listed firm also operates other restaurant chains, including KFC, Pizza Hut and Burger King. The Starbucks deal marks the company’s first major venture into Germany. Picture: A Starbucks outlet in Frankfurt. Source: Reuters