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Thursday 1 November 2007

Starbucks to enter ready-to-drink market

The worlds biggest coffee-shop chain, Starbucks Corporation, is aiming to enter a new market for ready-to-drink coffee in China, where the company's business is still at an embryonic stage. This has been confirmed by chairman and founder Howard Schultz. Starbucks and PepsiCo Inc. have started selling bottled Frappuccinos coffee drinks through retail stores in China, aiming to replicate their results in North America, where the business grew to $1 billion (£500 million) from nothing a decade ago. Shultz said in an interview today in China “We want to build a new profit centre around ready-to-drink coffee (in China)."

Starbucks will also add at least 80 coffee shops each year in China, where annual sales growth is significantly higher than the company's 18% global target. Although China has more than 5,000 years of tea-drinking culture and consumes 700,000 tonnes of tea every year, more and more Chinese, especially young people, are drinking coffee, which has become a symbol of western culture.

The initial idea for Starbucks is to first sell bottled coffee in Shanghai, Beijing and Hong Kong, before expanding to other Chinese cities. Chairman, Mr Schultz expected the new business would boost brand awareness and attract more customers to its shops, which currently total 540 in China, Hong Kong and Taiwan. (source: Google News)

Sony Corporation may sell stakes in its animated film division, Sony Pictures Animation, and a unit that creates special effects for movies. The company hired investment bank Houlihan Lokey Howard & Zukin to explore the possible sale of about a 50% stake in Sony Pictures Animation and a larger stake in Sony Pictures Imageworks, Jim Kennedy, spokesman for Sony Pictures Entertainment said. Sony Pictures Animation produced the movies ``Surf's Up'' and ``Open Season.'' and competes with the very successful DreamWorks Animation SKG Inc., creator of the ``Shrek'' series, and Walt Disney Co.'s Pixar unit, which made ``Cars.'' Imageworks has created effects for films including Sony's ``Spider-Man'' as well as movies for other studios.

The two divisions are probably worth a total of about $500 million (£250 million), said a person, who requested anonymity because any discussions about selling stakes are preliminary. Revenue for Sony's movie and television unit increased 6.4% to $1.6 billion (£800 million) in the fiscal second quarter ended September, 30. The movie that took in the most revenue in the quarter was ``Superbad,'' Tokyo-based Sony said in its earnings statement last week. (source: Bloomberg)

Travel company Thomas Cook confirmed that full-year earnings would be in line with its expectations and said it “had seen strong early bookings in the UK for next year's summer season.” Thomas Cook, Europe's second-largest travel firm, created from the tie-up of KarstadtQuelle's travel unit and MyTravel, also said it was increasingly confident it would top the 140 million euros (£97 million) of cost savings it had originally expected from the deal.

The firm, sells around 6 million holidays a year, and said “it had seen a significant improvement in margins over the last eight weeks helped by its decision to cut back the number of holidays on offer and a dismal summer sparking demand.” It added winter bookings in the booming Scandinavian market were up 13% with summer holidays set to go on sale soon.

Shares in Thomas Cook rose 1.5% in opening trade to 300 pence, valuing the business at around £3 billion ($6 billion). (source: Reuters)

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