For sale: One fancy corporate jet, used on only 15 flights, worth $45 million. No reasonable offer refused.
That's the sign Starbucks & Co.'s CEO Howard Schultz is wearing around his neck lately as his iconoclast corporation goes from defining an era to trying to save a few ducats. With the financial ruin this country is in lately, I'd say he's lucky that sign doesn't read "Will Work For Food."
It's not Howard's fault, really. Who could have predicted that the economic casualties of late would reach all the way up to the ivory tower that Starbucks built for itself? Those white and green cups and the five dollar magic java they hold have become a sort of status symbol of this "Gimme" generation. Don't get me wrong; I enjoy a venti cafe mocha every now and again just like the rest of us do. And it is almost impossible to not get sucked in to the whole ambiance: the indy music playing softly overhead, the smell of coffee and biscotti treats swirling around your face, the tapping of laptop keys as important people get important things done while sipping their lattes.
Starbucks couldn't have planned that better if they misted Zoloft in through the vents. The only retailer that rivals that kind of atmospheric addiction is Victoria's Secret.
But Starbucks' numbers are in, and as we all know, numbers don't lie. They cheat, but they don't lie. Revenue is down 6 percent from last year, with some locations being nearly 30 percent in the red. The solution: Cut $500 million out of the operating budget. Somewhere.
That means over 300 Starbucks cafes are closing their doors very soon. And about 6,700 more unfortunate workers will entire the already swollen unemployment pool. In a letter to his employees, Howard blames the world and its financial downturn, saying they are only "trying to navigate a deteriorating global economy" and predict an unpredictable situation that will only gets worse before it gets better. Thanks for the tip, Howie.
Howard does want his employees to know that he himself is taking a pay cut - he slashed his own salary down to $10,000 yearly, the lowest amount he could have on the books and still receive health care benefits.
Last year he made $1.2 million just in salary. His total compensation package for 2008 rang the cherries at more than $9.7 million. That's a lot of java.
So some stores will close, some will collect aid, some of us will still continue to make coffee at home. Howard, in the meantime, will try to get by on his multi-million dollar nest egg. Oh, and try to "navigate" this financial crisis without a jet.
Forgive me if I don't cry over spilled frappachino.
Monday, February 2, 2009
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1 comment:
We made Starbucks big and wealthy because we the clients paid the high price coffee feeling important by being part of the trend we can not blame Howard or Starbucks or any other company we first have to blame our selfs and than the corporate America ( was not better when we all were in euphoria even if it was fake ......... ) now is reality time and we need solutions ..... . Lets use our best of us and help the economy moving and be open for suggestions and improvements ..
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