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The Honolulu Advertiser
Posted on: Wednesday, January 25, 2006

Starbucks buys out local partner

 • PDF: Full text of the Starbucks announcement

By Dan Nakaso
Advertiser Staff Writer

Coffee Partners Hawaii, which operates 54 Starbucks shops in Hawai'i including in Koko Marina, will be bought out by Starbucks and dissolve as of March 31, it was reported yesterday.


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Seattle-based Starbucks Corp. has acquired full ownership of its Hawai'i joint-venture company, Coffee Partners Hawaii, which operates 54 Starbucks stores in the Islands, the two companies announced yesterday.

Company officials did not disclose the terms of the deal.

Nearly 1,150 Coffee Partners Hawaii employees were told in meetings yesterday that they will become official Starbucks employees when Coffee Partners Hawaii dissolves after March 31.

Starbucks' customers should not see any difference when Starbucks increases its equity interest in Coffee Partners Hawaii from 5 percent to 100 percent, said Sherri Rigg, spokeswoman for Coffee Partners Hawaii.

"For Starbucks customers, it will be business as usual," Rigg said. "It will be a seamless transition."

Rigg will continue to be part of the management team that will run the operation for at least another year.

Coffee Partners Hawaii's ownership group, Café Hawaii Partners, plans to continue expanding its Jamba Juice operation by eight stores in 2006 and focus on other Hawai'i businesses, including the upcoming P.F. Chang's China Bistro, which is scheduled to open later this year in the luxury Hokua condominium.

Coffee Partners Hawaii and Starbucks have been involved in several community activities, including AIDS Walk for Life, All Books for Children, Starbucks Ukulele Festival and Starbucks Paddling Series. In November, the Muscular Dystrophy Association-Hawai'i honored Greg Meier, Coffee Partners Hawaii's president, with its humanitarian award.

With its investment and development partner, The MacNaughton Group, Rigg said some of the proceeds from the Starbucks acquisition will be used to continue Coffee Partners Hawaii's philanthropic activities.

"Our experience in our conversations with Coffee Partners is that they really have been great corporate citizens when it comes to philanthropy in Hawai'i," said Kelvin H. Taketa, president and CEO of the Hawai'i Community Foundation.

"My hope is that Starbucks will continue the legacy that they've established. ... Local businesses have been exceedingly generous, so when a Mainland company takes over, we all hold our breath."

Starbucks also has contracted with The MacNaughton Group to provide real estate development services for the next five years, Coffee Partners Hawaii said.

Starbucks also said it was acquiring Cafe del Caribe, the joint-venture company that operates Starbucks' 13 Puerto Rico stores. Starbucks had owned a 5 percent interest in Cafe del Caribe.

"Starbucks is very excited about these acquisitions, which we believe will allow us to achieve greater operational efficiencies and accelerate our expansion in both markets," said Martin Coles, president of Starbucks Coffee International. "Additionally, these transactions allow Starbucks and all our partners to be more integrated into the communities within Hawai'i and Puerto Rico by building on our strong human connections in those markets."

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com.