Starbucks

The knives are out at Starbucks
Commentary: Pace of sweeping overhaul continues
By MarketWatch
Last update: 2:47 p.m. EDT July 29, 2008
Comments: 25
NEW YORK (MarketWatch) -- The bloodletting continues at Starbucks Corp.
The beleaguered coffee-shop operator on Tuesday announced further operational changes, cheering shareholders as the stock climbed nearly 6%.

Its most recent changes include cutting 1,000 jobs, closing more than half of the stores in its Australian market and doing away with its chief operating officer position.
This comes in the wake of unveiling hundreds of store closings, revamping its reward-card program, installing new espresso machines, introducing a smoothie-like beverage, retooling its menu and overhauling its entertainment business.
Whew.
The overhaul is the handiwork of Chairman Howard Schultz who returned to Starbucks' center stage as chief executive earlier this year and is working to transform the troubled company back into a thriving business.
"I want to acknowledge from the outset some of the difficulty that many of you may be experiencing given the tough operating environment we are facing," Schultz wrote in a memo to employees released Tuesday afternoon. "But let me assure you that there has been a relentless focus on making the decisions necessary to put us all in a position to win."
Schultz said he believes the best days for Starbucks are ahead and called this "another defining moment" for the company. They've had a lot of defining moments lately.
Righting Starbucks (SBUX:
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SBUX 14.99, +0.76, +5.3%) is a daunting task, and Schultz stepped into the spotlight and ignited a turnaround -- it hasn't been pretty. The company, which was a high flyer in past years, has seen its shares fall more than 40% over the past year.
Doing nothing is never a successful strategy, as difficult as these "defining moments" might be -- particularly for those most directly impacted -- they are the kind of painful steps that could actually make a difference.
-- Angela Moore, U.S. commentary editor