It's an admission by Starbucks management that they expanded way too fast and without adequate market planning, especially in regard to sustainability of demand during a downturn.
They were some of the smartest guys in restauranting and they just blew Economics 101.
They were some of the smartest guys in restauranting and they just blew Economics 101.
rich
Publically traded restaurants/coffee shops chased expansion because that was what Wall Street demanded. I don't think management had a lot of control over the situation. Now that the demand for expansion has changed to a demand for margins and cash flow, the rapidly expanding companies are screwed. Should we blame the management or the stock market for the problem? I personally don't like to blame anyone, I just like to mock their incompetent decisions.
Every time somebody asks me if I donate to charity I tell them I routinely pay $3.00 more for a cup of coffee than I should so somebody can have health insurance without getting a real job.
If they'd change their product names to something more pronouncable, I might visit them on my own volition. The only time I go to Starbucks is for my wife, and she has to write down the order, with phonetic instructions.
Every time somebody asks me if I donate to charity I tell them I routinely pay $3.00 more for a cup of coffee than I should so somebody can have health insurance without getting a real job.
I'm not sure what kind of person that makes me.
BTW, I say that mostly in jest (I've worked such jobs myself in the past), but the flip side is I've worked with skilled engineers in recent years that didn't have health insurance because they basically were forced to switch from full-time to contract work at the same hourly rates (except without the benefits).
Sometimes they got a little bitter when they went to Starbucks.
booooooring and OT - at least give us something OT interesting or economics related - like a good stats source on your "pumper schmucks" rant from an earlier thread...how was that in the top 5%-10% for example?
I got three last wedneday. Going for four tomorrow.
I hate starbucks as a company. They got so complacent and crappy, just like US Auto manufacturers. Overpriced crap, poorly made with surly employees. At the beginning they cared about the customer, made things right, gave free drink cards out if they made a mistake, but from 4 years ago to just 6 months ago, (the last time I went and paid) the experience was horrible and I never got a response to my comment submitted on the Starbucks website.
I go way out of my way to spend money at other coffee shops. I hope they shrivel up and die as a company. Its their loss - I used to spend $20 a week there, now $0.
But I give them credit, they are the only company so far that's looked into the mirror and said, "you know, nobody needs our product very badly, now or in the foreseeable future. Let's start shrinking now."
Stock popped 7% AH on the barista firings. Productivity improvements. What if they closed all their stores. Death spiral. I hope it stays up so I can short it.
Alo, ok, I take it back. They are lying to themselves! They have about 11,000 more to close to get back to their core: an urban specialty coffee shop in a few West Coast cities.
e-c-, I log the number (for S&P 500 mini and two full size S&P 500 futures contracts) from this site daily at 1:35 PST (it clears shortly thereafter). I have been doing so for one year now. Intraday Futures Prices - Markets Data Center - WSJ.com
As the market moves down, it ends up being lots of blown powder/good money after bad for these jerks/schmucks.
OMG, Jas not only said what I was going to say but beat me to it. Excuse me while I espresso my apologies.
Starbucks made its own weather in many specific locales. Not only did they take up lots of premium storefronts but they caused other businesses to adopt business models that included such time tested strategies as 'there's a Starbucks next door to generate foot traffic.
Jas, your comment makes no sense. I've been the one arguing that CRE would be hit after residential (non-residential investment was still increasing in May, but I think the evidence is overwhelming that it will decline in the 2nd half of '08).
Yes, I also argued that CRE wasn't as overbuilt as residential. We will have to wait and see if I'm correct - but surely you don't think Starbucks closing 600 stores is evidence that the coming CRE bust will be worse than the housing bust?
Correction - numbers flying all over...there are about 7000 company owned in the US, and another 4000 licensed. So, they are cutting 5% of all stores, approximately.
Every time somebody asks me if I donate to charity I tell them I routinely pay $3.00 more for a cup of coffee than I should so somebody can have health insurance without getting a real job.
I'm not sure what kind of person that makes me.
You're drastically overpaying while increasing access to healthcare. I think that makes you a Democrat.
One of the largest Ford dealers in the northern part of the Central Valley has shut down, one of several well-known regional companies apparently succombing to the weak economy.
Elk Grove Ford, based in the in the Elk Grove Auto Mall, closed Friday evening.
Owner Keil Enterprises has not commented publicly on reasons for the shutdown. The number of people losing their jobs is not known. Earlier this year it shut down its Great Valley Chrysler-Jeep-Mazda-Isuzu dealership in Sacramento.
Iconic Central Valley recreational vehicle dealership owner Dan Gamel is also shutting down, closing all six of his companys outlets, from Bakersfield to Redding. The action will cost about 200 people their jobs.
The company, once described as the nations fourth largest RV dealer, shut down other locations in Santa Rosa and Chico earlier in the year, saying the weak economy, the credit crunch and high gas and diesel prices were the reasons.
And the six-store furniture retailer RoomSource Furniture & Accessories of Sacramento, has filed for Chapter 11 bankruptcy protection.
The company has been in business for 11 years. Going-out-of-business sales are underway. About 200 workers will lose their jobs.
Next to go should be KKD (Krispy Kreme). That alone would probably lower health care costs by about 1% by decreasing diabetes and cardiovascular disease.
12th Percentile writes:
I guess they never read that Boston Market case study.
12th Percentile | 07.01.08 - 5:49 pm | #
Yes, it was Boston Chicken I think. Expanded too much too fast, then MCD bought them and it's now Boston Market. I just hope SBUX management is a little more savvy...as I do buy their beans. Kind of hard to go back to Folgers or Maxwell house....like drinking muddy water.
OT: Not sure we got this when it came out and I missed posting it in the NY CRE post today. Look at these DC numbers. Anyone who says DC can't commercial can't crash because of the gov't jobs apparently never read the history of DC CRE. And look at all that coming online in the next few years. Big trouble ahead.
In the first three months of 2008, 6.3 million square feet of office space was leased, compared with 7 million in the first quarter of 2007. That decline of 10 percent comes as developers are finishing projects financed in the years of the boom. Some 131 buildings with about 14.4 million square feet of office space were under construction in the region at the end of the first quarter, according to CoStar. The downturn in leasing combined with the developments in the pipeline could create a glut, analysts said.
stealthwii@gmail.com said: "...I hate starbucks as a company. They got so complacent and crappy, just like US Auto manufacturers. Overpriced crap, poorly made with surly employees. At the beginning they cared about the customer, made things right, gave free drink cards out if they made a mistake, but from 4 years ago to just 6 months ago, (the last time I went and paid) the experience was horrible and I never got a response to my comment submitted on the Starbucks website."
I go to my local one nearly every morning. I get a quality product there, I know all the employees by name (and they all call me by name), they take excellent care of me and I tip well.
Then again, I also live in the only city in America with housing prices that are still rising (or at least not falling), the only "Leave it to Beaver" town for the New Millenium the country has left.))
girlbear writes:
I always thought Starbucks coffee was a little bitter.......girlbear
I lived in New Orleans for 20 years. Since I left town, I consider Starbucks the closest thing to real N.O. coffee. But now we order Community Dark Roast coffee direct from the roaster in Baton Rouge. (at about $5.00/ lb. including shipping). It's the world's best "inferior good".
Like somebody said in the previous thread, the local library could serve as the same sort of hang out as SBUX. They've got books, comfy chairs, free computers, free CDs and DVDs to play on your laptops, rest rooms that anyone can use, and meeting rooms. All they need is a coffee bar area where talking is allowed.
AC said... I'm not sure what kind of person that makes me.
Yeah, what callous said.
So how much did the downturn in the building trades contribute to the downturn at Starbucks? It's a rare contractor who can drive by a coffee place without pulling in.
This is disappointing. I don't want to see Starbucks do something sensible; I wanted to see them come crashing to the ground in a hail of fire and brimstone, oblivious of their annoyingness to the very last.
And now for the next dotcom bubble which I will call The BIG BOX Bubble -- with every retailer out there, overvalued, overbuilt, over-leveraged, mis-managed, mis-guided and as God is my witness, everything and anything that you just came to know about The Housing Bubble and The OwnerShip Society -- is about to befall The Big Box Sector!
Don't watch out below, because there is nowhere to hide and this is the first brick and mortar in a long series of dominos that are all connected to absolute shit loans and retardation!
Cool thanks for the link - a chart showing your volumes log across time with some call out boxes noting events in that period would be first class info porn...
Regarding a local hangout to replace sbux: Our local Borders (Howard Hughes Promenade in Westchester, CA) has all the above including a coffee and sandwich bar. (Not sure about the Wi-fi, though)
Spunkmeyer, I am thinking of a new concept store where children design and sew their own clothes and parents pay a premium to do so. Kind of like a sweatshop but getting paid by the employees.
I never understood why we need huge corporations to carry out simple tasks that any local mom & pop can do. No question that drilling for oil, making airplanes or developing drugs require the resources of large organizations, but making burgers or coffee?
Kona,
Yes, few will be able to afford the Big Box because rents are too high, and the owners cannot afford to lower the rents enough because the costs of construction on the newer stuff was too high. Therefore, the properties will go bust, and sell at a prices that is justified by much lower rents. (This assumes that many of the LT leases will be worthless because many of these retailer will reorganize.)
I have never had a coffee from starbucks. Maybe one day I will, but I do not think so. I brew a mean cappucino at home, a touch of real vanilla extract and a sprinkling of cinnamon on top.....yummmy stuff and it costs next to nothing per cup!
But good news for everyone else. Starbucks overpays for their locations, inflating rents for everyone else. Now local coffee shops can take over the better locations, as they don't need the high margins that Starbucks require.
If I see one more Jack In The Box, I'm gonna be pissed and what about all this stupidity with Rite Aid & Walgreens....too many, too much, goodby, get the hell out of my town!
peAkcredit writes:
How I beat SBUX and fight the recession: after the bike ride, I find the busiest SBUX, there's one every 3 blocks to choose from, and ask for a DECAF(!). If they have to brew it, it's on the house.
No gas fill-up. Free coffee. Ready for the depression.
Near my hood is a new strip mall that never should have gone in, and they have about 20 stalls being very slowly built, and lots of FOR Lease signs and not ONE business lined up yet! This place has been ramped for almost a year now and I hope these suckers go broke!
I'm now selling:
Save the endangered shopping bags bumper stickers for SUVs!
Back in the good old dayz (e.g. 2005) when I was grading LSAT, TOEFL, etc...online for ETS (i.e. before outsourcing to India), I would take my lunch down the street from my condo in the Gaslamp in San Diego for a "quad shot on ice" at Starbucks. Plenty of familiar faces to talk baseball, music, etc... Just could never understand why there were four of them within a double-play ground ball.
Zirpy,
The reason she doesn't carry much cash is, because if she needs some, all she has to do is give the guy or girl next to her a lap dance, and, viola, she's got cash. Her body is liquid.
I think I read somewhere that SBUX provides an inexpensive business setting for people, esecially those who work at home and don't have an office, to use for client meetings and transacting business.
Sebastian, "Then again, I also live in the only city in America with housing prices that are still rising (or at least not falling), the only "Leave it to Beaver" town for the New Millenium the country has left.))"
As the restaurant industry in the U.S. turns increasingly dour, major brands are turning their attention abroad, where business remains relatively robust and growing middle classes are creating large pools of consumers eager to taste affordable American-style fare.
big box retailers are often the anchor of shopping centers.
they tend to not pay much rent at all.
thus, rents and bigbox, less of an issue then one would think.
we're marketing to big box guys right now and we know that we need to throw up mad TI and take nothing more than a percentage rent in order to get them to take a long lease.
its on the other suckers where we make the money.
not too many CRE folks runnin' around here are there?
dc1000,
You argument is foolish. Big box anchors might have attracted smaller, higher paying guys in the past, but most smaller guys aren't making enough money to pay the premium rents or pad site costs, let alone expand. So, the developers will not be able to pay subsidies to the Big Box guys who in turn cannot pay the rents and move in. Therefore, the smaller guys won't come. I think you are a clown sometimes, because you work for developers you are easily swayed into bad assumptions. Just my thoughts, though...
Perhaps when you were in B-school they didn't tell you about the absolute distruction of the DC commercial market in the late 80s. All the tallest buildings were underwater. I happened to be coming out of college back then with a fancy degree and the job market was dismal. I took a job as a real estate appraiser. I worked in the DC market. You really, really, shoudl read some history if you aren't in too deep already.
Perhaps you'll read some history when this is over. "how could this have happened? DC is recession proof!"
Starbucks overpays for their locations, inflating rents for everyone else.
I have some friends that were working on opening a coffee shop. Strangely enough, they had no plans to actually run a coffee shop business. They intended to lease the space, set it up, and then appeal to Starbucks to open up a location there (presumably at a profit when Starbucks bought them out). After some informal discussions with Starbucks regarding the location(s) in question, they could see it wasn't going to work, so they bailed.
I haven't touched base with these guys for a while, but it was my understanding that they had a few housing properties "outstanding" that they had intended to "flip". Needless to say, I had no interest in giving them any cash to help out with this endeavour.
In the past, employees were down-sized, then we were right-sized. From the StarBucks headline, it now appears we are about to be "transformed" by corporate America. Wonder how many focus groups & how many PR dollars were spent to come up with the "transformed" terminology. Can't wait for the writer of "Dilbert" to pick up on this one.
Wow, first SUVs, now Starbucks! Things I'd like to see go away next (as long as we're dreaming)...
iPod shuffles
Angelina Jolie
Greater Denver
Daily Kos
"The Waterfalls of New York"
Olive Garden
CNN
Graduation ceremonies for 8th graders
I'll continue...
Kerry/Edwards bumper stickers on SUVs
Kathy Griffin
Keith Olberman
Tivo
Hip Hop
Global warming warnings on EVERY nature show on the tube
"Independents"
Celebrity chefs
Rehab
What would be the next affordable-little-luxury-for-common-men-and-women that goes bust?
Let your rug rats make their own pottery for a birthday outlets
Sunglass Hut kiosks
Those joints that start selling Christmas trees starting in mid Sept. No Christmas this year. People will be burning their real trees for warmth cause home heating oil will go through the roof.
From the StarBucks headline, it now appears we are about to be "transformed" by corporate America. Wonder how many focus groups & how many PR dollars were spent to come up with the "transformed" terminology.
When my last employer used to close call centers and consolidate (hey, show the market we're serious and close some centers/lay folks off - assclowns), they referred to it as "co-locating".
I almost never go to the mall but I had to stop there the other day. Check it out online, the gardens mall in palm beach gardens, fl. I was shocked to walk past 3 starbucks within 200 feet of each other. One is across from the other on different levels. How can they do this???
And one other thing, if you think in terms of decades, why do anything now? Today the ST risk completely outweighs the reward, so you should wait until the risk falls substantially while the rewards return. Unless, of course, you are a flipper who euphemistically calls himself a developer or LT developer/investor. Oh, wait, you got to build to keep getting those management fees and loans from your banker. Never mind, I know where your motives lie.
elvis,
keep trying. i get paid as the GP / Managing Member after a waterfall to patient equity. Management fees keep the lights on but dont "make" any money.
dc1000,
I completely understand land development, but I also understand that land prices started collapsing roughly two years ago. So, either your customer is buying lots that he cannot build a house on and sell to make a profit, or you are selling land during a period of fear at a low value rather than think over "the long term" and hold until prices return. If your cost basis and holding costs are so low as you claim, selling now seems rather short term and foolish. Unless you need the money and are motivated. Ding. Ding. Ding.
Another truism: Patient money gets impatient when their investment prices start collapsing. Especially after a bubble, when the sophisticated developers/managing partners liquidated all their land holdings.
OT again, trader walt writes:
I learned about coffee from a jobber who handled all the Salvadorian coffee coming into New Orleans in the '60's and 70's. He said:
Coffee is an acquired taste. Coffee beans have high oil content. When they are roasted the oil smokes as it is heated. Dark roast coffee is just coffee beans which are burned more when roasted than "regular" coffee. I knew several roasters and coffee company owners. One told me that one of the best selling coffees in America is made from the cheapest Brazilian beans that are called "ruru" or something like that. The name refers for the color of brown silt in the river which looks like, well, "ruru".
trader walt | 07.01.08 - 8:37 pm | #
oh by the way, assface, the lot sales prices are predetermined by the 2006 contract with quarterly escalators.
PLEASE PLEASE find your own sandbox to play in
dc1000 |
Let's see. If lot prices are way down from 2006, it makes no sense for a homebuilder to buy them at 2006 prices now unless they way underpaid for them in 2006 or you are leaving out details. Given that you are a developer and prone to inflate the truth (puffery), I imagine that you are leaving out details. By the way, what is your cost basis in the land? My guess is you have serious development costs that need to be repaid and that is why you have to sell now.
Builders don't take down unless it makes sense. That is why they need take downs. But, if you are a public company, by definition, your investors are not patient. So what is it? Do you have patient investors (ie privately funded) or are you publically traded? You seem to be speaking out both sides of your mouth.
thanks for helping my shorts. I'm glad you think in decades. if you had any sense, you'd know what happened in the late eighties (a few decades ago). You probably are just some kid in a room saying you have big investments right now. If not, i feel bad for you. if you had any sense and had real money on the line, which i hope you don't, and you really are investign heavily in the future of the DC metro market, all i can say is, thanks.
Call me lots of names, I'll name drinks after them in your honor.
If you are just some arrogant guy about to lose a bunch of money, some guy who couldn't be bothered to realize how history deals with your type, Please, borrow more, the future can be yours. You are the only one who understands how to make money in real estate. You are the first person with an MBA to be right ALL the time.
2) betting on the long-term future of DC is something I feel very comfortable with
3) how have i helped your shorts buy leasing space to credit tenants, selling lots to one of the most profitable builders in america, taking fees on this that and the other thing, building wealth, creating jobs, supporting scores of families, and shaping the physical reality of this town, while...
I have followed dc1000 comments for a couple years. I live in DC. My SIL is a partner in a large east coast law firm who does these kind of big time real estate deals. I have always thought what he has written had a ring of authenticity to it.
Big developers in the DC area were and are the same ones that were here 30 plus years ago. In DC the Catholic Church was and probably still is a big owner of downtown land.
The magic car lot mile next to Tysons is owned by a family who leases the space to car dealerships. I have never sat down and did the research but my guess is a lot of DC metro area building is controlled by a handful of people who are going on at least the 2nd generation now.
dc1000 you should know better than to argue. they post here, that's what they do. and by the posts they understand little and argue with the people that actually, you know do.
it's sort of like this thread. instead of talking about starbucks' business model or earnings or profit margins and sales make-up, they talk about how the coffee tastes. honestly, how do you even have an economic discussion with people that dense?
so to get back on topic, what do you think the problem is for starbucks? how do they turn it around? is it the price, expansion, or do we have sector saturation and not starbucks saturation?
Nova,
That's certainly plausible. Tysons was cheap farmland not too long ago. Some smart person(s) may have drawn a bullseye right were 267 and 495 meet and started buying.
Last I heard, Borders used the same expensive T-mobile service that SBUX just dumped. Plus, their coffee is "Seattle's Best" which was just bought out by SBUX a couple years back. You may as well go across the courtyard and get the real SBUX and carry it back over. I think that location might hold up with all the office buildings nearby.
Better yet, cut across Jefferson over to Marina del Rey, go about half a mile up Lincoln and grab a Peet's. It's like SBUX without having sold their soul to the devil. IIRC, Mr. Peet (RIP) used to be chief roaster for SBUX before they got on their knees for Wall Street. Peet's didn't have WiFi when I left town last year, but you can occasionally scam it from Panera at the other end of the strip mall if you have a good wireless card.
And at my old company, you weren't transformed or right-sized, you were "transitioned."
you said in previous posts that you had an MBA. If you don't, kudos to you. Waste of money.
if you haven't had your mind tainted by academics but you still dont' understand what is happening with the DC CRE market, then you are just my sort of person. Email Ipodious and get him to invest as well. The DC area is impervious to downturns. More houses, more office, more retail. It will all always make money. Borrow more to build more.
Then again, If you aren't faking it online to try to talk your book, you are an idiot.
Perhaps your kids will remember the DC crash of 2011 because you are too dim to remember the one from 88.
Anyway, thanks. I'll drink many cold beers when your markets shit the bed.
I used to do appraisals of guys like you who were in bankruptcy, in DC. Had a billion and then were in the hole. They thought they were smart because some guy would loan them twenty mil. You must be quite a smarty.
I know how this ends. Like i said, thanks. If they will let you borrow more, i say go for it. You are a titan of commerce. Borrow and build. Punish small minded people like me. Get it!
dc1000,
You may have been successful in the DC area lately and you may be part of a family business with a visionary patriach. However, family success doesn't necessarily go from one generation to the next. One can puff his chest and act like he is the smartest guy in the room during a bubble, but, ultimately, that arrogance will crush him in a downturn. You've posted here for a long time and I respect the fact that you are intelligent enough to follow this site. However, despite my rants tonight, I really do urge you to be cautious in these times.
And land development and investment is my language as it is your, so I don't try to act like you are talking above me and I won't do the same. Good luck, but this is a long and painful period. Act accordingly.
As for ipodius, sometimes he is right and more often he is wrong. Just like a gambler, the house will get him.
A great Starbucks alternative at 18th & G NW. Capitol Java coffee cart where Ben craft brews individual cups with a traditional expresso machine of the type that Starbucks traded for their "new" automated machines. Add in the fact that you can tell Ben actually enjoys his job and it is a great experience as well as fine coffee. If you are in the neighborhood, visit him.
Boston Chicken's fall was less about the overexpansion (which was significant) and more about the fraud that accompanied it (creating off balance sheet entities to suck up all the losses involved in opening new stores, and then consolidating then only after they turned a profit).
I'm hoping that all of the Starbucks shops in this area shutter soon. We already managed to drive out Krispy Kreme. Local business FTW.
But potential employees for strip club owners.
Americans are beginning to realize that it's cheaper to stay in their living rooms at home rather than at "America's livingroom".
It's an admission by Starbucks management that they expanded way too fast and without adequate market planning, especially in regard to sustainability of demand during a downturn.
They were some of the smartest guys in restauranting and they just blew Economics 101.
I always thought Starbucks coffee was a little bitter.......
It'll probably be good news for locally owned coffee bars, though.
What is the crack equivalent of coffee? Is it Mountain Dew or is it crack? Either way, one of those two are probably seeing booming business.
Deja Vu
--
"This is more bad news for strip mall owners ..."
Wait a minute, CR, CRE was not as overbuilt as RRE, right?
Jas
Elvis, we already have way to many girls for our clientel. It is acutally a boon to business since the girls rent the space and work for tips.
They were some of the smartest guys in restauranting and they just blew Economics 101.
rich
Publically traded restaurants/coffee shops chased expansion because that was what Wall Street demanded. I don't think management had a lot of control over the situation. Now that the demand for expansion has changed to a demand for margins and cash flow, the rapidly expanding companies are screwed. Should we blame the management or the stock market for the problem? I personally don't like to blame anyone, I just like to mock their incompetent decisions.
Every time somebody asks me if I donate to charity I tell them I routinely pay $3.00 more for a cup of coffee than I should so somebody can have health insurance without getting a real job.
I'm not sure what kind of person that makes me.
What is the crack equivalent of coffee? Is it Mountain Dew or is it crack? Either way, one of those two are probably seeing booming business.
No comparison between Mountain Dew and Starbucks:
Caffeine Content of Drinks
SBux is also eliminating 12,000 jobs. It amazes me how many people can't see the dominoes lined up...
If they'd change their product names to something more pronouncable, I might visit them on my own volition. The only time I go to Starbucks is for my wife, and she has to write down the order, with phonetic instructions.
600, eh. That's almost half the Starbucks stores in Santa Monica.
Every time somebody asks me if I donate to charity I tell them I routinely pay $3.00 more for a cup of coffee than I should so somebody can have health insurance without getting a real job.
I'm not sure what kind of person that makes me.
BTW, I say that mostly in jest (I've worked such jobs myself in the past), but the flip side is I've worked with skilled engineers in recent years that didn't have health insurance because they basically were forced to switch from full-time to contract work at the same hourly rates (except without the benefits).
Sometimes they got a little bitter when they went to Starbucks.
OT -- Gary, did O- clear the first part ('c-') or second part ('f- p-') with you?
Yahoo! 404 - Page Not Found
Hey, maybe we'll be on the same team, 'The O- Team', now.
jg,
booooooring and OT - at least give us something OT interesting or economics related - like a good stats source on your "pumper schmucks" rant from an earlier thread...how was that in the top 5%-10% for example?
free starbucks ice cofee day tomorrow.
I got three last wedneday. Going for four tomorrow.
I hate starbucks as a company. They got so complacent and crappy, just like US Auto manufacturers. Overpriced crap, poorly made with surly employees. At the beginning they cared about the customer, made things right, gave free drink cards out if they made a mistake, but from 4 years ago to just 6 months ago, (the last time I went and paid) the experience was horrible and I never got a response to my comment submitted on the Starbucks website.
I go way out of my way to spend money at other coffee shops. I hope they shrivel up and die as a company. Its their loss - I used to spend $20 a week there, now $0.
"SBux is also eliminating 12,000 jobs"
WHere did you get this?
Or are you assuming 20 ppl per store?
But I give them credit, they are the only company so far that's looked into the mirror and said, "you know, nobody needs our product very badly, now or in the foreseeable future. Let's start shrinking now."
Unless jdj is right and they have 24,000 stores.
They have about 12,000-14,000 worldwide i think
Stock popped 7% AH on the barista firings. Productivity improvements. What if they closed all their stores. Death spiral. I hope it stays up so I can short it.
Alo, ok, I take it back. They are lying to themselves! They have about 11,000 more to close to get back to their core: an urban specialty coffee shop in a few West Coast cities.
There are, or should I say were, just under 8000 starbucks in the US.
e-c-, I log the number (for S&P 500 mini and two full size S&P 500 futures contracts) from this site daily at 1:35 PST (it clears shortly thereafter). I have been doing so for one year now.
Intraday Futures Prices - Markets Data Center - WSJ.com
As the market moves down, it ends up being lots of blown powder/good money after bad for these jerks/schmucks.
Stock popped 7% AH on the barista firings.
So we're entering this, maybe my favorite phase of a bear market, where every worker shed is somehow a good thing worth a few cents a share.
Starbucks Plans to Close 600 U.S. Stores, Fire 12,000
Starbucks to Close 600 Stores, May Cut 12,000 Jobs (Update3) - Bloomberg.com
girlbear writes:
I always thought Starbucks coffee was a little bitter.......
So true. I suppose some employees will be bitter now too.
crispy&cole,
LA Times has the story about SBux laying off 12000 employees here.
Perhaps they should have just ventured into ramen cooking instead...
OMG, Jas not only said what I was going to say but beat me to it. Excuse me while I espresso my apologies.
Starbucks made its own weather in many specific locales. Not only did they take up lots of premium storefronts but they caused other businesses to adopt business models that included such time tested strategies as 'there's a Starbucks next door to generate foot traffic.
Jas, your comment makes no sense. I've been the one arguing that CRE would be hit after residential (non-residential investment was still increasing in May, but I think the evidence is overwhelming that it will decline in the 2nd half of '08).
Yes, I also argued that CRE wasn't as overbuilt as residential. We will have to wait and see if I'm correct - but surely you don't think Starbucks closing 600 stores is evidence that the coming CRE bust will be worse than the housing bust?
Best to all.
Correction - numbers flying all over...there are about 7000 company owned in the US, and another 4000 licensed. So, they are cutting 5% of all stores, approximately.
thanks for the 12k ax links.
ac writes:
Every time somebody asks me if I donate to charity I tell them I routinely pay $3.00 more for a cup of coffee than I should so somebody can have health insurance without getting a real job.
I'm not sure what kind of person that makes me.
You're drastically overpaying while increasing access to healthcare. I think that makes you a Democrat.
I guess they never read that Boston Market case study.
More CRE pain:
One of the largest Ford dealers in the northern part of the Central Valley has shut down, one of several well-known regional companies apparently succombing to the weak economy.
Elk Grove Ford, based in the in the Elk Grove Auto Mall, closed Friday evening.
Owner Keil Enterprises has not commented publicly on reasons for the shutdown. The number of people losing their jobs is not known. Earlier this year it shut down its Great Valley Chrysler-Jeep-Mazda-Isuzu dealership in Sacramento.
Iconic Central Valley recreational vehicle dealership owner Dan Gamel is also shutting down, closing all six of his companys outlets, from Bakersfield to Redding. The action will cost about 200 people their jobs.
The company, once described as the nations fourth largest RV dealer, shut down other locations in Santa Rosa and Chico earlier in the year, saying the weak economy, the credit crunch and high gas and diesel prices were the reasons.
And the six-store furniture retailer RoomSource Furniture & Accessories of Sacramento, has filed for Chapter 11 bankruptcy protection.
The company has been in business for 11 years. Going-out-of-business sales are underway. About 200 workers will lose their jobs.
Central Valley Business Times
Wow, that's mean, M- C- of C-.
I bet if they made a sequel with Sean Penn playing a bignosed mental defective and he got laid off it would really be moving.
Five percent? let's see, that's a "tall" in Starbuckspeak.
jg,
Mean to ac, or to Democrats?
Holy Sheep Sh#t.....maybe Chuck E Cheese needs some more space..
Next to go should be KKD (Krispy Kreme). That alone would probably lower health care costs by about 1% by decreasing diabetes and cardiovascular disease.
No, chipotle is the next to go. 5,000 calorie burritos should be outlawed
12th Percentile writes:
I guess they never read that Boston Market case study.
12th Percentile | 07.01.08 - 5:49 pm | #
Yes, it was Boston Chicken I think. Expanded too much too fast, then MCD bought them and it's now Boston Market. I just hope SBUX management is a little more savvy...as I do buy their beans. Kind of hard to go back to Folgers or Maxwell house....like drinking muddy water.
OT: Not sure we got this when it came out and I missed posting it in the NY CRE post today. Look at these DC numbers. Anyone who says DC can't commercial can't crash because of the gov't jobs apparently never read the history of DC CRE. And look at all that coming online in the next few years. Big trouble ahead.
In the first three months of 2008, 6.3 million square feet of office space was leased, compared with 7 million in the first quarter of 2007. That decline of 10 percent comes as developers are finishing projects financed in the years of the boom. Some 131 buildings with about 14.4 million square feet of office space were under construction in the region at the end of the first quarter, according to CoStar. The downturn in leasing combined with the developments in the pipeline could create a glut, analysts said.
Nothing at all related :-
Man With Knife Kills 5 Shanghai Cops - TIME
Just incredible.
stealthwii@gmail.com said: "...I hate starbucks as a company. They got so complacent and crappy, just like US Auto manufacturers. Overpriced crap, poorly made with surly employees. At the beginning they cared about the customer, made things right, gave free drink cards out if they made a mistake, but from 4 years ago to just 6 months ago, (the last time I went and paid) the experience was horrible and I never got a response to my comment submitted on the Starbucks website."
I go to my local one nearly every morning. I get a quality product there, I know all the employees by name (and they all call me by name), they take excellent care of me and I tip well.
Then again, I also live in the only city in America with housing prices that are still rising (or at least not falling), the only "Leave it to Beaver" town for the New Millenium the country has left.
))
Sebastian
This is GRANDE news!
girlbear writes:
I always thought Starbucks coffee was a little bitter.......girlbear
I lived in New Orleans for 20 years. Since I left town, I consider Starbucks the closest thing to real N.O. coffee. But now we order Community Dark Roast coffee direct from the roaster in Baton Rouge. (at about $5.00/ lb. including shipping). It's the world's best "inferior good".
Chinook, there are other sources of wonderful beans besides Starbucks, and much less expensive.
These clowns are a zero.
It's the world's best "inferior good".
trader walt
Better than Cy-O-Nid?
AC said... I'm not sure what kind of person that makes me.
My hero. For saying it, not the buying expensive coffee part.
Sebastian, do you listen to the Prairie Home Companion? You should, its your kind of show.
Like somebody said in the previous thread, the local library could serve as the same sort of hang out as SBUX. They've got books, comfy chairs, free computers, free CDs and DVDs to play on your laptops, rest rooms that anyone can use, and meeting rooms. All they need is a coffee bar area where talking is allowed.
AC said... I'm not sure what kind of person that makes me.
Yeah, what callous said.
So how much did the downturn in the building trades contribute to the downturn at Starbucks? It's a rare contractor who can drive by a coffee place without pulling in.
What would be the next affordable-little-luxury-for-common-men-and-women that goes bust?
This is disappointing. I don't want to see Starbucks do something sensible; I wanted to see them come crashing to the ground in a hail of fire and brimstone, oblivious of their annoyingness to the very last.
I can see a connection in the SUV/Starbucks downturn.
Can we officially call the Greater Depression now?
And now for the next dotcom bubble which I will call The BIG BOX Bubble -- with every retailer out there, overvalued, overbuilt, over-leveraged, mis-managed, mis-guided and as God is my witness, everything and anything that you just came to know about The Housing Bubble and The OwnerShip Society -- is about to befall The Big Box Sector!
Don't watch out below, because there is nowhere to hide and this is the first brick and mortar in a long series of dominos that are all connected to absolute shit loans and retardation!
Kona
I get it now Sebastian is The Truman Show
jg,
Cool thanks for the link - a chart showing your volumes log across time with some call out boxes noting events in that period would be first class info porn...
"What would be the next affordable-little-luxury-for-common-men-and-women that goes bust?"
Those f**king Build-A-Bear mall stores, for a start.
Regarding a local hangout to replace sbux: Our local Borders (Howard Hughes Promenade in Westchester, CA) has all the above including a coffee and sandwich bar. (Not sure about the Wi-fi, though)
I wonder how many giant BIG BOX pet stores are needed?
Call it "Grande Depression"
I worry about the negative impact of lower caffeine consumption on the U.S. productivity.
Spunkmeyer, I am thinking of a new concept store where children design and sew their own clothes and parents pay a premium to do so. Kind of like a sweatshop but getting paid by the employees.
What would be the next affordable-little-luxury-for-common-men-and-women that goes bust?
Gotta be nail salons. There are even more of those than Starbucks.
How about Baby Boomer Depression?
Wow, first SUVs, now Starbucks! Things I'd like to see go away next (as long as we're dreaming)...
iPod shuffles
Angelina Jolie
Greater Denver
Daily Kos
"The Waterfalls of New York"
Olive Garden
CNN
Graduation ceremonies for 8th graders
I never understood why we need huge corporations to carry out simple tasks that any local mom & pop can do. No question that drilling for oil, making airplanes or developing drugs require the resources of large organizations, but making burgers or coffee?
Victory Coffee for everyone, comrades!
How about a massive tsunami of Wal-Mart Rollbacks, as in they get the Fu_k outta my town!
Kona,
Yes, few will be able to afford the Big Box because rents are too high, and the owners cannot afford to lower the rents enough because the costs of construction on the newer stuff was too high. Therefore, the properties will go bust, and sell at a prices that is justified by much lower rents. (This assumes that many of the LT leases will be worthless because many of these retailer will reorganize.)
What would be the next affordable-little-luxury-for-common-men-and-women that goes bust?
Williams-Sonoma, Pottery Barn, Crate and Barrel, etc.
Most specialty women's boutiques. $200 jeans!!
Boating mfgs for the little folks
I have never had a coffee from starbucks. Maybe one day I will, but I do not think so. I brew a mean cappucino at home, a touch of real vanilla extract and a sprinkling of cinnamon on top.....yummmy stuff and it costs next to nothing per cup!
"This is more bad news for strip mall owners ..."
But good news for everyone else. Starbucks overpays for their locations, inflating rents for everyone else. Now local coffee shops can take over the better locations, as they don't need the high margins that Starbucks require.
If I see one more Jack In The Box, I'm gonna be pissed and what about all this stupidity with Rite Aid & Walgreens....too many, too much, goodby, get the hell out of my town!
Is it possible to short only big box retail REITs? If so, what are they?
peAkcredit writes:
How I beat SBUX and fight the recession: after the bike ride, I find the busiest SBUX, there's one every 3 blocks to choose from, and ask for a DECAF(!). If they have to brew it, it's on the house.
No gas fill-up. Free coffee. Ready for the depression.
what about all this stupidity with Rite Aid & Walgreens
Medicare Part D
cute Elvis, my sister in law is a stripper and she is about as oblivious to this downturn as any of her "peers."
However, her "hard" asset of choice happens to be Coach handbags, she never seems to carry much cash!
Elvis,
Near my hood is a new strip mall that never should have gone in, and they have about 20 stalls being very slowly built, and lots of FOR Lease signs and not ONE business lined up yet! This place has been ramped for almost a year now and I hope these suckers go broke!
I'm now selling:
Save the endangered shopping bags bumper stickers for SUVs!
KG
What would be the next affordable-little-luxury-for-common-men-and-women that goes bust?
Custom frame shops.
I predict a massive and complete shakeup of the custom framing industry.
Back in the good old dayz (e.g. 2005) when I was grading LSAT, TOEFL, etc...online for ETS (i.e. before outsourcing to India), I would take my lunch down the street from my condo in the Gaslamp in San Diego for a "quad shot on ice" at Starbucks. Plenty of familiar faces to talk baseball, music, etc... Just could never understand why there were four of them within a double-play ground ball.
"my sister in law is a stripper"
At least your brother's wife has a job.
Zirpy,
The reason she doesn't carry much cash is, because if she needs some, all she has to do is give the guy or girl next to her a lap dance, and, viola, she's got cash. Her body is liquid.
Mish will love this wire-release!
I think I read somewhere that SBUX provides an inexpensive business setting for people, esecially those who work at home and don't have an office, to use for client meetings and transacting business.
Community Coffee Link:
Community Coffee
$4.59/12oz. Not too shabby.
Elvis it helps that mom is able to watch her 4-month old while she works the biker-convention in myrtle beach for 2 weeks
Sebastian, "Then again, I also live in the only city in America with housing prices that are still rising (or at least not falling), the only "Leave it to Beaver" town for the New Millenium the country has left.
))"
I thought I recognized you, Sebastian!!
I always thought Starbucks coffee was a little bitter.......
girlbear | 07.01.08 - 5:13 pm | #
I always suspected that was because they used cheap African coffee and pretended it was premium.
"At least your brother's wife has a job."
Until her assets start to sag!
Oh, and half the SBUX have free WiFi also. Not theirs, but from the nearby stores. While you're waiting for your free decaf.
jim,"I always suspected that was because they used cheap African coffee and pretended it was premium."
Oh No jim, Starbucks coffee is smuggled out of paradise...in little velvit sacks... tied under the necks of little birds. Or so it was priced!!!!!
Way over priced in MHO!!!
Do you thing they will try to rebrand and change their name to Starnickels?
Elvis, think MoonCents
U.S. restaurant chains turn attention to consumers abroad
Baltimore Sun breaking news, sports, weather and traffic in Baltimore - baltimoresun.com
As the restaurant industry in the U.S. turns increasingly dour, major brands are turning their attention abroad, where business remains relatively robust and growing middle classes are creating large pools of consumers eager to taste affordable American-style fare.
people
PLEASE DONT FEED THE TROLLS
big box retailers are often the anchor of shopping centers.
they tend to not pay much rent at all.
thus, rents and bigbox, less of an issue then one would think.
we're marketing to big box guys right now and we know that we need to throw up mad TI and take nothing more than a percentage rent in order to get them to take a long lease.
its on the other suckers where we make the money.
not too many CRE folks runnin' around here are there?
dc1000,
You argument is foolish. Big box anchors might have attracted smaller, higher paying guys in the past, but most smaller guys aren't making enough money to pay the premium rents or pad site costs, let alone expand. So, the developers will not be able to pay subsidies to the Big Box guys who in turn cannot pay the rents and move in. Therefore, the smaller guys won't come. I think you are a clown sometimes, because you work for developers you are easily swayed into bad assumptions. Just my thoughts, though...
elvis,
you are the troll.
btw, i AM the developer i dont work for them.
enjoy your island of experience.
dc1000
did you see my earlier post?
Perhaps when you were in B-school they didn't tell you about the absolute distruction of the DC commercial market in the late 80s. All the tallest buildings were underwater. I happened to be coming out of college back then with a fancy degree and the job market was dismal. I took a job as a real estate appraiser. I worked in the DC market. You really, really, shoudl read some history if you aren't in too deep already.
Perhaps you'll read some history when this is over. "how could this have happened? DC is recession proof!"
Get out while you can.
Sincerely,
Your money making troll advisor.
Starbucks overpays for their locations, inflating rents for everyone else.
I have some friends that were working on opening a coffee shop. Strangely enough, they had no plans to actually run a coffee shop business. They intended to lease the space, set it up, and then appeal to Starbucks to open up a location there (presumably at a profit when Starbucks bought them out). After some informal discussions with Starbucks regarding the location(s) in question, they could see it wasn't going to work, so they bailed.
I haven't touched base with these guys for a while, but it was my understanding that they had a few housing properties "outstanding" that they had intended to "flip". Needless to say, I had no interest in giving them any cash to help out with this endeavour.
gee 12th.
and i guess those landlords with more than a 5 year time horizon did terrible as they came out of the 80's into the 90's?
geeze people, understand this:
real estate players. true real estate players think in terms of decades not years, not quarters, not months.
In the past, employees were down-sized, then we were right-sized. From the StarBucks headline, it now appears we are about to be "transformed" by corporate America. Wonder how many focus groups & how many PR dollars were spent to come up with the "transformed" terminology. Can't wait for the writer of "Dilbert" to pick up on this one.
Wow, first SUVs, now Starbucks! Things I'd like to see go away next (as long as we're dreaming)...
iPod shuffles
Angelina Jolie
Greater Denver
Daily Kos
"The Waterfalls of New York"
Olive Garden
CNN
Graduation ceremonies for 8th graders
I'll continue...
Kerry/Edwards bumper stickers on SUVs
Kathy Griffin
Keith Olberman
Tivo
Hip Hop
Global warming warnings on EVERY nature show on the tube
"Independents"
Celebrity chefs
Rehab
What would be the next affordable-little-luxury-for-common-men-and-women that goes bust?
dc1000,
Spoken like a true developer. There is one truism in life: Developers get rich during real estate upswings and go broke during downturns.
Don't worry, though, you can always get a job at Starbucks...oh, wait a second, maybe you cannot.
dc - if you can do it, great. But having lived in DC too, I tend to think that that area's getting dicey too.
BTW - SBUX sucks. Best coffee I ever had I get 2X/wk at a small local shop here in my little burg. That's my weekly treat.
How Mayberry is it? If a barista calls in sick, there are two or three customers who empty trash, clean the bathroom, etc.
I hope that they survive.
From the StarBucks headline, it now appears we are about to be "transformed" by corporate America. Wonder how many focus groups & how many PR dollars were spent to come up with the "transformed" terminology.
When my last employer used to close call centers and consolidate (hey, show the market we're serious and close some centers/lay folks off - assclowns), they referred to it as "co-locating".
I hate that f'ing word.
How Mayberry is it? If a barista calls in sick, there are two or three customers who empty trash, clean the bathroom, etc.
I hope that they survive.
I second, and third that motion.
I almost never go to the mall but I had to stop there the other day. Check it out online, the gardens mall in palm beach gardens, fl. I was shocked to walk past 3 starbucks within 200 feet of each other. One is across from the other on different levels. How can they do this???
And one other thing, if you think in terms of decades, why do anything now? Today the ST risk completely outweighs the reward, so you should wait until the risk falls substantially while the rewards return. Unless, of course, you are a flipper who euphemistically calls himself a developer or LT developer/investor. Oh, wait, you got to build to keep getting those management fees and loans from your banker. Never mind, I know where your motives lie.
elvis,
keep trying. i get paid as the GP / Managing Member after a waterfall to patient equity. Management fees keep the lights on but dont "make" any money.
geeze, why can't i stop feeding the trolls?
land bought in '90, developed slowly over time, under contract for 9 figures, has a take down schedule that one must continue to meet.
i know you have no idea about land development but please stop making a fool of yourself.
gee, i have a customer who is buying, i guess i should stop selling lots each month when there are yet another 700 to go (after selling 100's prior).
dc1000,
As a developer you have as much credibility as a crack whore trying to borrow $15 to buy food for her kids. 'Nuff said.
dc1000,
I completely understand land development, but I also understand that land prices started collapsing roughly two years ago. So, either your customer is buying lots that he cannot build a house on and sell to make a profit, or you are selling land during a period of fear at a low value rather than think over "the long term" and hold until prices return. If your cost basis and holding costs are so low as you claim, selling now seems rather short term and foolish. Unless you need the money and are motivated. Ding. Ding. Ding.
Another truism: Patient money gets impatient when their investment prices start collapsing. Especially after a bubble, when the sophisticated developers/managing partners liquidated all their land holdings.
elvis,
really, i have to control myself in feeding trolls but here goes.
land developer, (ME), enters into contract to sell 1000 lots to national homebuilder in 2006. 250 lots sold to date with 50 or so sold this year.
there is a proscribed, contractual, legal obligation to continue to sell the lots to the buyer.
the buyer does not 'take down' the lots unless they have a firm contract in hand from an end-user.
thus, when our buyer comes to us with an end user contract, we are obligated to sell lots to our buyer.
oh by the way, assface, the lot sales prices are predetermined by the 2006 contract with quarterly escalators.
PLEASE PLEASE find your own sandbox to play i
OT again, trader walt writes:
I learned about coffee from a jobber who handled all the Salvadorian coffee coming into New Orleans in the '60's and 70's. He said:
Coffee is an acquired taste. Coffee beans have high oil content. When they are roasted the oil smokes as it is heated. Dark roast coffee is just coffee beans which are burned more when roasted than "regular" coffee. I knew several roasters and coffee company owners. One told me that one of the best selling coffees in America is made from the cheapest Brazilian beans that are called "ruru" or something like that. The name refers for the color of brown silt in the river which looks like, well, "ruru".
trader walt | 07.01.08 - 8:37 pm | #
oh by the way, assface, the lot sales prices are predetermined by the 2006 contract with quarterly escalators.
PLEASE PLEASE find your own sandbox to play in
dc1000 |
Let's see. If lot prices are way down from 2006, it makes no sense for a homebuilder to buy them at 2006 prices now unless they way underpaid for them in 2006 or you are leaving out details. Given that you are a developer and prone to inflate the truth (puffery), I imagine that you are leaving out details. By the way, what is your cost basis in the land? My guess is you have serious development costs that need to be repaid and that is why you have to sell now.
elvis,
there is no choice but to sell.
see, we entered into a contract in 2006. damn near the top of the market.
we have no choice.
they buy we sell.
i know its hard to understand when all you think about is day trading and house flipping and whatever else.
this is a nine figure contract with a public company.
it has a 12 year or MORE timeline.
we're in year 3
they buy we sell
what part do you miss here?
in 2006, we put under contract. now we sell on a take down schedule.
if you dont know what a take down is then i have no hope to educate you.
why do you think we can close on construction loans in the scores of millions in this environment right now for a land development deal?
jimminy. i should be putting my kids to bed instead i'm arguing with a troll
elvis,
i only hope to 'learn ya something here.'
we have deposits from them on the order of 20%.
cash money, banked.
they no close, we take money.
so if their sales prices fall 19% then they still buy.
if their sales prices fall 19% and they can squeeze their subs another 20% they still buy.
oh and by the way, sometimes large companies with long time scales do things in order to carve out market share and solidify market position.
the cost basis in this land is practically ZERO. in fact, i'm working on a 50 acre town center right now with let me see...
let me think about this for a second...
zero cost basis.
oh, and you know what?
the town center doesn't need to make money for ten years or more.
thus the free rent to anchors.
really dude.
what do you do?
Builders don't take down unless it makes sense. That is why they need take downs. But, if you are a public company, by definition, your investors are not patient. So what is it? Do you have patient investors (ie privately funded) or are you publically traded? You seem to be speaking out both sides of your mouth.
my buyer is a public home builder
i have 119 limited partners / minority members in three privately held entities.
DC whatever
thanks for helping my shorts. I'm glad you think in decades. if you had any sense, you'd know what happened in the late eighties (a few decades ago). You probably are just some kid in a room saying you have big investments right now. If not, i feel bad for you. if you had any sense and had real money on the line, which i hope you don't, and you really are investign heavily in the future of the DC metro market, all i can say is, thanks.
Call me lots of names, I'll name drinks after them in your honor.
If you are just some arrogant guy about to lose a bunch of money, some guy who couldn't be bothered to realize how history deals with your type, Please, borrow more, the future can be yours. You are the only one who understands how to make money in real estate. You are the first person with an MBA to be right ALL the time.
Your milkshake=My milkshake.
thanks
12th,
you're funny.
1) no MBA here.
2) betting on the long-term future of DC is something I feel very comfortable with
3) how have i helped your shorts buy leasing space to credit tenants, selling lots to one of the most profitable builders in america, taking fees on this that and the other thing, building wealth, creating jobs, supporting scores of families, and shaping the physical reality of this town, while...
4) signing for it all personally?
really, what are you doing?
I have followed dc1000 comments for a couple years. I live in DC. My SIL is a partner in a large east coast law firm who does these kind of big time real estate deals. I have always thought what he has written had a ring of authenticity to it.
Big developers in the DC area were and are the same ones that were here 30 plus years ago. In DC the Catholic Church was and probably still is a big owner of downtown land.
The magic car lot mile next to Tysons is owned by a family who leases the space to car dealerships. I have never sat down and did the research but my guess is a lot of DC metro area building is controlled by a handful of people who are going on at least the 2nd generation now.
Nikkei took a dive already !
dc1000 you should know better than to argue. they post here, that's what they do. and by the posts they understand little and argue with the people that actually, you know do.
it's sort of like this thread. instead of talking about starbucks' business model or earnings or profit margins and sales make-up, they talk about how the coffee tastes. honestly, how do you even have an economic discussion with people that dense?
so to get back on topic, what do you think the problem is for starbucks? how do they turn it around? is it the price, expansion, or do we have sector saturation and not starbucks saturation?
Nova,
That's certainly plausible. Tysons was cheap farmland not too long ago. Some smart person(s) may have drawn a bullseye right were 267 and 495 meet and started buying.
mjc:
Last I heard, Borders used the same expensive T-mobile service that SBUX just dumped. Plus, their coffee is "Seattle's Best" which was just bought out by SBUX a couple years back. You may as well go across the courtyard and get the real SBUX and carry it back over. I think that location might hold up with all the office buildings nearby.
Better yet, cut across Jefferson over to Marina del Rey, go about half a mile up Lincoln and grab a Peet's. It's like SBUX without having sold their soul to the devil. IIRC, Mr. Peet (RIP) used to be chief roaster for SBUX before they got on their knees for Wall Street. Peet's didn't have WiFi when I left town last year, but you can occasionally scam it from Panera at the other end of the strip mall if you have a good wireless card.
And at my old company, you weren't transformed or right-sized, you were "transitioned."
dc area folks know the name Lerner?
Oh great. And I was planning on getting a job at Buck's when my real estate career tanked...
dc
you said in previous posts that you had an MBA. If you don't, kudos to you. Waste of money.
if you haven't had your mind tainted by academics but you still dont' understand what is happening with the DC CRE market, then you are just my sort of person. Email Ipodious and get him to invest as well. The DC area is impervious to downturns. More houses, more office, more retail. It will all always make money. Borrow more to build more.
Then again, If you aren't faking it online to try to talk your book, you are an idiot.
Perhaps your kids will remember the DC crash of 2011 because you are too dim to remember the one from 88.
Anyway, thanks. I'll drink many cold beers when your markets shit the bed.
I used to do appraisals of guys like you who were in bankruptcy, in DC. Had a billion and then were in the hole. They thought they were smart because some guy would loan them twenty mil. You must be quite a smarty.
I know how this ends. Like i said, thanks. If they will let you borrow more, i say go for it. You are a titan of commerce. Borrow and build. Punish small minded people like me. Get it!
dc1000,
You may have been successful in the DC area lately and you may be part of a family business with a visionary patriach. However, family success doesn't necessarily go from one generation to the next. One can puff his chest and act like he is the smartest guy in the room during a bubble, but, ultimately, that arrogance will crush him in a downturn. You've posted here for a long time and I respect the fact that you are intelligent enough to follow this site. However, despite my rants tonight, I really do urge you to be cautious in these times.
And land development and investment is my language as it is your, so I don't try to act like you are talking above me and I won't do the same. Good luck, but this is a long and painful period. Act accordingly.
As for ipodius, sometimes he is right and more often he is wrong. Just like a gambler, the house will get him.
"selling lots to one of the most profitable builders in america," dc1000
Toll is no longer profitable.
I love the Allman Brothers!
DC Folks --
A great Starbucks alternative at 18th & G NW. Capitol Java coffee cart where Ben craft brews individual cups with a traditional expresso machine of the type that Starbucks traded for their "new" automated machines. Add in the fact that you can tell Ben actually enjoys his job and it is a great experience as well as fine coffee. If you are in the neighborhood, visit him.
Boston Chicken's fall was less about the overexpansion (which was significant) and more about the fraud that accompanied it (creating off balance sheet entities to suck up all the losses involved in opening new stores, and then consolidating then only after they turned a profit).
I'm hoping that all of the Starbucks shops in this area shutter soon. We already managed to drive out Krispy Kreme. Local business FTW.
girlbear, you said Starbucks coffee is a little bitter.
Try Seattle's Best. Starbucks owns them, but the coffee process is entirely different. Smooooth! And low-acid.
I'm wondering how Starbucks action will affect the Seattle's Best operations.