SEATTLE, May 3 -- Starbucks Coffee Co. acquired Tuesday The Coffee Connection in a common stock transaction worth approximatley $24 million.
The acquisition brings Starbucks several critical assets, said Howard Schultz, chairman and chief executive officer of the Seattle company.
The Coffee Connection is a retailer and roaster of specialty coffee with 23 shops in Massachusetts, Connecticut, New Jersey and New York.
The Coffee Connection also licenses two airport kiosks in Boston's Logan Airport. The current annualized sales for the company's retail stores, mail order and wholesale operations is approximately $20 million.
Schultz also noted that The Coffee Connection's fully developed management infrastructure will enable Starbucks to accelerate the roll out of company owned stores.
In its fiscal year ended January 31, 1994, The Coffee Connection generated sales of $14.7 million and an operating loss in fiscal 1994 of approximately $750,000. The Coffee Connection's operating loss resulted primarily from the cost of building an infrastructure to support its rapid growth.
Sales per average Coffee Connection store were approximately $850, 000.
'The investment that Coffee Connection has made in infrastructure build up over the last two years will serve as a platform to enhance Starbucks growth and development throughout the New England markets,' said Coffee Connection CEO George Howell.
Starbucks has a total of 323 retail stores and licensed airport stores located in, and around, Seattle, Chicago, Vancouver, B.C.; Portland, Ore.; Denver, Los Angeles, San Diego, San Francisco, Washington, D.C.; Boston, New York, and Minneapolis.
Starbucks plans to open at least 75 additional stores during the remainder of fiscal 1994, including additional stores in its three newest markets -- New York, Boston and Minneapolis.
In addition to its 323 stores, Starbucks has a national direct mail business and a specialty sales group serving a wholesale club, a specialty department store chain, a national bookstore chain, a regional airline and fine restaurants and institutions.
