THE IRISH operation of Starbucks reduced its losses by almost two-thirds in the 12 months to September 2007 - its second year in business - as turnover doubled to €11.1 million on the back of the expansion of the Irish chain.
The world's largest coffee chain, had 12 Irish stores at the end of September 2007, up from eight a year earlier. The Irish chain has grown to 23 stores since then. Most are located in Dublin.
US-owned Starbucks says it will continue to grow the chain in Ireland, despite the closure of 663 outlets in the US and Australia, and the resignation of the managing director of its UK and Irish operations a fortnight ago.
A spokeswoman for Starbucks said the company "remained excited by the opportunities presented by the Irish market".
Additional revenues helped cut losses at Starbucks' Irish operation to €359,000 last September from €1 million a year earlier, according to new accounts for Starbucks Coffee Company (Ireland).
The directors said in their 2007 report that "more challenging market conditions" were likely to slow sales growth in its existing stores, but that sales overall would rise as it opened more new stores.
Starbucks opened its first Irish store in August 2005 at Dundrum shopping centre in Dublin. Four of its 23 Irish shops are owned by unrelated companies which hold licence agreements with Starbucks.
Royalty and licence fee income at Starbucks Ireland rose 41 per cent to €757,000 last year.
Last month the firm's Seattle-based parent company announced its first loss in 16 years after the cost of 600 US shop closures left a shortfall of $6.7 million (€4.5 million) in the three months to June.
The company is also closing 63 of its 84 shops in Australia.
Phil Broad, managing director of Starbucks UK and Ireland, resigned earlier this month, shortly after he assured that the difficulties facing the coffee chain in the US and Australia had not affected its business in Europe.
Mr Broad said that despite a "slight decline in traffic" in the three months to June, the UK and Ireland business would open 100 new stores by the end of next month. He was replaced by Darcy Willson-Rymer, vice-president of Starbucks Europe, Middle East and Africa.
Property leases at Starbucks' Irish company jumped to €1.4 million in September 2007 from €691,000 a year earlier, reflecting the expansion of the chain, while the number of staff almost doubled to 211 and the wage bill rose to €3.3 million from €1.8 million.
Gross profit margin rose to 19.3 per cent from 18 per cent, though the firm remained in the red with a negative operating profit margin of 1.1 per cent, despite a strong improvement from a year earlier.
The firm says it will not have to repay a loan to its parent company for at least 12 months from July 28th, 2008, the date of the signing of its 2007 annual accounts.
