INTERVIEW-Starbucks Japan CEO eyes sales up 70% by 2010
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By Sachi Izumi
TOKYO, July 5 (Reuters) - Starbucks Coffee Japan Ltd.'s
<2712.OJ> new chief executive said on Wednesday she aimed to
boost its sales by nearly 70 percent to $1 billion by 2010, when
it aims to have 1,000 stores across the country.
Maria Mercedes M. Corrales shrugged off concerns of
saturation in the local market and said Starbucks Japan, which
currently operates 624 stores nationwide, planned to expand
mainly in large cities.
"I think there is plenty of room for growth if you look at
the density of stores in Japan compared to other markets," she
said. "Manhattan alone has 80 stores. There is one on every
block, and they are all doing extremely well making a lot of
money."
"It is my belief, and also a lot of people in my organisation
believe, that we are under-represented still in major cities of
Japan," Corrales told Reuters in an interview a week after
becoming the head of Starbucks Japan, 40 percent owned by
Starbucks Corp. <SBUX.O> of the United States.
The Philippines native, who spent 31 years at privately held
U.S.-based jeans maker Levi Strauss & Co. and led its listed
Japan unit Levi Strauss Japan <9836.Q> from 2001 to 2005, took
the helm when the coffee shop chain was on a strong recovery path
after posting losses in 2002/03.
In May, Starbucks Japan forecast growth of nearly 13 percent
in its parent-only net profit for the current year to March, and
targetted a 2 percent rise in its same-store sales with
aggressive promotions and frequent introduction of new products
and limited-time offers.
The company's net profit jumped 51 percent in 2005/06 to 1.8
billion yen on sales of 67.9 billion yen ($591 million).
Its same-store sales have been exceeding year-ago figures for
the last 11 months since last August when they showed the first
year-on-year rise in four years.
AFTER 10 YEARS
Starbucks Japan, which is also 40 percent owned by purse
maker Sazaby League <7553.Q>, will celebrate next month the 10th anniversary of its first store opening in Tokyo's prestigious Ginza district.
Its store network has mushroomed in Japan since 1996. It has
also spurred the establishment of many similar speciality coffee shops,and Corrales estimates there are some 3,000 of them in the country now.
Howard Schultz, the chairman of the U.S. parent Starbucks,
told Reuters in 2002 that he expected to have 1,000 stores in
Japan by the end of 2007.
While Starbucks Japan now aims to reach that level by 2010,
Corrales said it will be smart in choosing store locations. It
will also try to expand in different formats such as stores in
bookstores, hospitals or universities.
"We will be very careful and make sure that we are in the
right location, so it will not be expansion for expansion's
sake," Corrales said. "We need to be strategic, very strategic in
the choice of locations."
"But we definitely need to provide more convenience," she
added.
Shares in Starbucks Japan closed down 1.1 percent at 47,700
yen compared with a 0.17 percent rise in the Tokyo Stock Exchange
food sector index <.IFOOD.T>.
($1=114.88 Yen)
((Reporting by Sachi Izumi, editing by Mike Miller;
Reuters Messaging: sachi.izumi.reuters.com@reuters.net;
sachi.izumi@reuters.com; +81-3-3432-8587))
Keywords: RETAIL JAPAN STARBUCKS
nT195503
05Jul06 11:31 GMT
Symbols:
de;SRB de;SRBF de;SRBS de;SRBX de;ZB2 gb;STB jp;2712 jp;7553 jp;9836
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