Starbucks Korea issues CPs to speed up domestic expansion

Starbucks Korea recently issued commercial papers worth 30 billion won (US$28.07 million), possibly to further speed up its domestic expansion, according to news reports on Feb. 19.

Seattle-based Starbucks is the nation’s No. 1 specialty coffee chain with about 1,100 outlets, followed by rival CJ’s A Twosome Place with 910 outlets. Its revenue hit the 1 trillion won mark last year for the first time as a coffee chain brand here.

The Korean unit, a 50:50 joint venture with local retail giant Shinsegae Group, last year opened 130 new outlets nationwide, spending about 100 billion won. Sources said the firm is seeking to raise funds possibly to open about 150 new stores this year as part of its aggressive expansion plans.

“We will continue to expand our presence here like we did last year,” a company spokesperson said. “We cannot confirm any details of the CPs now.”

According to industry watchers, Starbucks Korea is issuing CPs as it has reduced its debt over the past years thanks to strong earnings. In the early years, the firm issued CPs to fund the expansion. Its debt reached more than 60 billion won five years ago but the figure dropped to 4 billion won by the end of last year.