“It wasn't until I discovered Starbucks that I realized what it means when your work truly captures your heart and your imagination,” said Schultz.
After being rebuffed by the owners of Starbucks for his idea of taking the company in new directions, Schultz decided to leave and start a company of his own. He approached numerous investors for financial backing until he finally found support for his project. Several Starbucks partners were even willing to invest in him. In 1984, Schultz opened Il Giornale coffee bar in Seattle.
Il Giornale was Schultz’s takeoff of the Italian espresso bar concept he had fallen in love with in Milan. It was a small, friendly café, which soon became a popular gathering place for the Seattle sophisticates. As its popularity took off and Schultz planned for the expansion of his chain, he heard a rumor that one of the Starbucks partners wanted out of their business. He immediately seized the opportunity and put together a group of investors to make an offer, one of whom was Bill Gates, Sr.
In 1987, Schultz bought out all the partners of Starbucks for $3.8 million and merged Il Giornale and Starbucks to form the Starbucks Corporation. From that point on, there was no looking back for the company. Once Schultz took the helm of the company, he set about making his dream a reality. He created a relaxed and comfortable atmosphere, where customers could not only enjoy a basic cup of coffee but could enjoy an entire experience. He also instituted one of the most thorough training programs and compensation packages for all his Starbucks employees.
Schultz continued its steady expansion, immediately opening their first outlet outside of Washington State. After five years, the company went public and growth continued throughout North America. It then began expanding overseas, opening outlets in Japan. By 1992, there were 165 Starbucks locations; just two years later, there were 425. Sales increased from $100 million in 1993 to $465 million in 1995. New stores continue to open up around the world; 1,500 new stores were planned for 2006.
Starbucks is the number one specialty coffee retailer in the U.S. Schultz succeeded in creating a nationally recognized brand and creating a loyal culture of premium coffee drinkers. He popularized the café latte, the frappuccino and other specialty drinks. In 2004, Starbucks was ranked number eight on Fortune magazine’s list of “America’s Most Admired Companies.” Today, there are over 10,000 Starbucks stores in over 30 countries.
Following from his love of sports, Schultz was also the owner of the NBA’s Seattle Supersonics until recently, when he sold the team to investors from Oklahoma City for $350 million. He also owned the WNBA’s Seattle Storm and is a partner in Jamba Juice, a chain of smoothie restaurants with over 500 locations throughout the U.S.
From the blue-collar life in the projects to an estimated net worth of $700 million, Schultz also continues to stay true to his roots by giving back to the communities that support him.
Thinking Outside the Cup: Starbucks Is Borne
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