A global giant, Starbucks has Starbucks went bankrupt been in controversy since late 2023, with several stores closing and much speculation on social . After all, what Starbucks to lose so many stores and audiences nationwide? There has been a lot of talk about bankruptcy on social , but that is not exactly what has been happening.
It is quite strange to follow the closure of several giant companies in the country, since the problems remain behind the scenes and rarely reach the end customer – which, in general, is great and the result of excellent consultancy, marketing director and very well done advertising, since it masks the financial problems within the advertising bubble.
However, despite strong branding attracting a lot of attention on social , several partnerships, as we discussed in certain blogs last year, there is no point in just throwing marketing to the wind if your accounts don’t add up and, despite the profit the company makes, sometimes it can’t continue in the same way.
Judicial recovery: save me from bankruptcy, please!
This has already happened with Casas Bahia, which recently filed for bankruptcy protection, and now with Lojas Americanas, which withdrew from BBB23 about a year ago to try to close its accounts by focusing primarily on online stores (but not only). The big surprise was when, overnight, several stores of the world’s largest coffee shop chain announced their closures with no date set for reopening. And, apparently, the main culprit is the chain’s Brazilian parent company.
The largest in its niche, Starbucks is a giant powerhouse in the world of coffee shops in the United States, practically a fast food outlet in the area. Its decades of aesthetic photos on Tumblr and Pinterest references shaped an entire generation of teenagers in the 2014s, largely due to references from films and series. – Proving the power of branding.
However, it took a year for it to arrive in Brazil, and now it has begun to retreat from its previous advances. To give you an idea, in just one month, more than 43 stores were closed – and a new development in December seems to have made it clear that things are going from bad to worse – and it is not even Starbucks’ fault. In this last month of 2023, the announcement that the Starbucks Rewards points system will leave Brazil took everyone by surprise.
Bye bye: it’s all one big farewell for Starbucks in Brazil
After all, if the points and benefits system will be discontinued after January 31st, and the company itself has not renewed the rights to use the name and brand, then what will happen to the coffee shops from February onwards? There are alternatives such as another controlling company buying the rights to use the name, or even the company leaving Brazil altogether – thus renaming the remaining coffee shops.
First of all: no one is going france whatsapp number data bankrupt, and those who take care of Starbucks companies in Brazil are the ones who are most to blame for the mistake that is taking the franchise away from here. According to the lawsuit, SouthRock Brasil did not renew the rights to use the name of the Starbucks franchise in Brazil and, therefore, ended up losing the right to use it. Even with debts of more than 1.8 billion, the company tried to file for bankruptcy protection – which was denied.
So… It’s not Starbucks’ fault?
It is important to understand that Starbucks is a strong company in the country with a captive audience, and the problem lies with the operator (who brought the brand here in 2018). It is possible that the North American owners themselves will how employers and employees can avoid the costs of workforce disputes bring it to Brazil and, therefore, SouthRock will lose out.
Without judicial recovery, which is the government injecting money to protect the company from bankruptcy, SouthRock may lose the rights to the brand and still be stuck with billions in debt. Furthermore, the process is still under analysis, and there are still several stores of the brand that remain open, so it is difficult to predict what will happen. However, it is enough to say that branding alone does not secure a brand.
It’s all about branding… but not only.
When a company uses its strong branding, it is not exempt from mistakes, failures, wrong choices and other problems that may chine directory occur. In the world of marketing, it is especially important to look at planning. Concept creation and branding are not enough.
Outside Brazil, for example, McDonald’s has just created a competitor to Starbucks, mainly targeting the numbers and habits of Generation Z, who have rarely left their homes since the pandemic there. Thus, they created a coffee shop that serves the same types of drinks and food, in a modern drive-thru restaurant called Cosmc’s.
And he’s not the only one. Here in the interior of São Paulo, Kamzu saw such a great opportunity in the format of young coffee shops that, combined with good SEO work, it could be redirected like the Starbucks of São Carlos – and Starbucks doesn’t even have a store here. This is strong and powerful branding, which works as a public attraction. It’s something that SouthRock also knew how to do and how to work with Starbucks.
Debts, debts, debts…
In the 600-page-plus request! SouthRock’s lawyers state: “The group’s gross revenue! obtained monthly by Starbucks stores/coffee shops! R$50 million and! represents a very significant portion of the SouthRock Group’s consolidated cash flow.” What will become of SouthRock without Starbucks?
According to them, without the recovery! request being approved!there is no possibility of them paying their debts: “In the event of effective! retention of receivables that were! subject to fiduciary guarantee, therefore, the Claimants would! have all! of their gross! revenue retained and unavailable! making any chance of recovery impossible.
