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Starbucks Israel (סטארבקס)
Company typeSubsidiary
Industry Fast-food restaurant
Founded Israel (2001)
Defunct2003 [1]
Headquarters
Tel Aviv
,
Israel
Area served
Tel Aviv, Israel
Key people
CEO - Micki Kenan
Chairman - Giora Sarig [2]
ProductsCoffee
Parent Delek Group of Israel 80.5%
Starbucks 19.5% [3]

Starbucks Israel ( Hebrew: סטארבקס) was a coffee chain in Israel, opening in 2001, with six locations in Tel Aviv before closing in 2003.

History

Opening

Starbucks Coffee International, a subsidiary of Starbucks Coffee Company, partnered with Delek Group of Israel to form the Israeli subsidiary of Starbucks, under the joint venture known is Shalom Coffee Company. [4] The joint venture, formed in 2001, [5] was owned 19.5% by Starbucks and 80.5% by Delek, with Starbucks holding the option to increase their share to 50%. [6]

Delek paid $250,000 for the franchise rights, plus owed 6% of sales to Starbucks. [2]

Plans were for September 1, 2001 to have the first location open in Tel Aviv's Rabin Square. Starbucks had hoped to have 20 locations open in Israel within the first year. [7]

Closing

In 2002, within a year of Starbucks Israel opening, Delek was already looking to sell its stake. [2]

Before its closing, Starbucks had six locations in Tel Aviv, [8] with 120 employees. [9] Additionally they had previously planned on opening a location in Jerusalem but withdrew the plans due to fear of terror attacks. [10] On March 31, 2003, Starbucks announced that they would be closing their stores in Israel. [4]

Starbucks closing caused many controversies over rumors that the stores were closing due to political reasons. Many rumors began circulating on the internet that they were closing as part of an Arab boycott of American businesses in Israel. [11] Based on information put out by Starbucks, no information pointed towards caving into anti-Israel pressure. [12] Bill O’Shea, Starbucks VP of Business Development in Europe, Middle East and Africa, released a letter stating that Starbucks chose to close their Israel locations due to business reasons, not political. [13] [14]

Reemergence attempt

In September 2005 Starbucks hired MAN Properties Real Estate Consultants to explore options to return to Israel. Starbucks was looking for a managing partner to team up with in Israel for the renewed deployment strategy. [6]

See also

References

  1. ^ "Financial Release | Investor Relations | Starbucks Coffee Company". investor.starbucks.com. Retrieved 2014-08-18.
  2. ^ a b c "Globes English - Delek pressing Starbucks to buy its Starbucks Israel stake". globes.co.il. 9 July 2002. Retrieved 2014-08-18.
  3. ^ "BUSINESS: DIARY; Starbucks Closes Shops in Israel - New York Times". The New York Times. Retrieved 2014-08-18.
  4. ^ a b "Press Releases - Starbucks Dissolves Joint Venture with the Delek Group of Israel". gr.starbucks.com. Retrieved 2014-08-18.
  5. ^ TheMarker.com Staff (2001-04-19). "Delek Group and Starbucks International to form joint venture - TheStreet". thestreet.com. Retrieved 2014-08-18.
  6. ^ a b Starbucks to make a comeback - Retrieved 3 September 2014
  7. ^ "Starbucks: Israel's not too hot for us - Jerusalem Post | HighBeam Research". highbeam.com. Archived from the original on 2014-09-21. Retrieved 2014-08-18.
  8. ^ "Middle East: Kraft in, Starbucks out". foodanddrinkeurope.com. Retrieved 2014-08-18.
  9. ^ Tsoref, Ayala (April 2003). "Advertisement". Haaretz. haaretz.com. Retrieved 2014-08-18.
  10. ^ "Starbucks in Israel: what went wrong?". just-food.com. Retrieved 2014-08-18.
  11. ^ SHERRI DAY (June 2, 2003). "Counteracting the Internet Rumor" (PDF). New York Times. Retrieved 2014-08-18.
  12. ^ "Starbucks Rumor False". archive.adl.org. Retrieved 2014-08-18.
  13. ^ "Israel Customer Response v. August 24, 2003" (PDF). 10 September 2003. Retrieved 2014-08-18.
  14. ^ "Starbucks closes outlets in Israel". Snopes.com. 2 June 2003. Retrieved October 24, 2010.
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