Starbucks Transitions Retail Business in South Korea to E-Mart and GIC
Founding partner E-Mart will continue operations and growth of Starbucks Coffee Korea
Starbucks Coffee Company today announced it has agreed to sell its 50% ownership share of Starbucks Coffee Korea Co., Ltd. Joint venture partner E-Mart Inc. (Shinsegae Group) ("E-Mart ") will acquire an additional 17.5% interest in Starbucks Coffee Korea Co., Ltd., giving E-Mart 67.5% ownership of Starbucks operations in South Korea.
E-Mart has been Starbucks joint venture partner in South Korea since 1999, when the brand opened its first store near Ewha Womans University in Seoul. Since then, E-Mart has been a valuable strategic business partner throughout the market and has demonstrated their ability to elevate the Starbucks Experience across South Korea, with more than 1,500 stores across 78 cities, operated by more than 18,000 green apron partners (employees).
In addition, Starbucks Coffee Company has agreed to sell its remaining ownership share of Starbucks Coffee Korea Co., Ltd. to an affiliate of GIC Private Limited, (“GIC”), Singapore’s sovereign wealth fund. This will give GIC a 32.5% ownership stake in Starbucks Coffee Korea Co., Ltd.
“As Starbucks fifth largest market, South Korea continues to be an important market for Starbucks,” said Michael Conway, group president, International and Channel Development. “Part of our success in South Korea - and in many of our International markets - is due to our expertise and judgment in knowing when to rely on local partners to continue to build the business. E-Mart and GIC share Starbucks values and commitment to a positive experience for partners and have been recognized for their commitment to community stewardship. Starbucks is confident in E-Mart and GIC’s ability to continue to elevate the Starbucks Experience for customers and identify unique opportunities to reach more customers throughout this important market.”
“Starbucks and E-Mart have had many conversations on how we can continue to grow the Starbucks brand in the market, which led to this decision,” said T.J. Hyung, Executive Vice President of E-Mart. “This transaction is the result of the strong performance and partnership we have achieved together over the past 20 years. E-Mart will continue to enhance the customer experience and social value that Starbucks has been creating, with a new partner GIC as well as Starbucks."
“Starbucks Coffee Korea is a leading branded coffee chain with consistent and strong growth prospects due to its high brand awareness and continuous innovation,” said Choo Yong Cheen, GIC’s chief investment officer of private equity. “As a long-term investor, GIC is confident that Starbucks Coffee Korea will play an important role in setting retail coffee trends and further driving industry growth in South Korea. We are pleased to partner with E-Mart, an experienced and capable operator in the consumer retail space, to support the next chapter of this successful brand.”
As with all of Starbucks licensed markets, the company will continue to maintain a strong relationship with Starbucks Coffee Korea, leveraging Starbucks key global success drivers to enhance the local Starbucks Experience for customers and partners in Korea.
The completion of the business transition is expected over the next 90 days. Because E-Mart will remain the operator of Starbucks Coffee Korea, the rhythm of the business will remain uninterrupted with no impact to partners or customers.