April 2, 2003
All six Starbucks cafes in Israel will be shut down at the end
of the week, Starbucks Coffee International and the Delek Group
said as they announced the end of their brief partnership. All 120
of the coffee chain's employees in Israel will be laid off.
According to Israel's Haaretz.com, poor sales and Delek's failure
to find an investor to bail it out of a losing venture caused the
decision to shut down the expensive coffeehouses. Starbucks Corp.,
the parent of Starbucks Coffee International, told Haaretz that
its decision to dissolve the joint venture was driven by "market
challenges," an allusion, the newspaper said, to "Israel's
severe recession and security problems."
"It was a very difficult decision," Mark McKeon, president
of Starbucks Coffee International for Europe, Middle East and Africa
told Haaretz. "Following months of serious discussions and
market reviews with the Delek Group, we came to this amicable and
mutual decision. Our commitment in the market continues to be strong
and long-term, and we will return at an appropriate time."
Starbucks and Delek opened their first Israeli coffee shop in late
2001 with plans to reach 20 outlets nationwide by the end of 2002,
but wound up opening only six outlets, all in the Tel Aviv area.
Please note that this does not mean an end to the boycott of Starbuck.
For further information please visit the Boycott