June 18, 2015
As you may remember, Starbucks first purchased the brand, which was a much-loved privately owned chain of pastry stores mainly located in Northern California, in 2012 for a reported $100 million. The sale came at a time when Starbucks was trying to compete more closely against breakfast behemoths like McDonald’s that were, literally, eating Starbucks lunch in terms of sales.
In addition to the retail stores, Starbucks also hoped that by bringing the brand’s pastries into their own retail stores would stem the tide of people who may be stopping into Starbucks to pick up their coffee but then heading elsewhere to purchase a treat to go with their coffee.
The second strategy appears to be working. Starbucks reported that their food sales are up 16% year over year so it is a huge growth area for them. Unfortunately, Starbucks says that the stand-alone La Boulange simply aren’t cutting the mustard and – as such – the decision to shut them down along.
Some might be wondering that since this is the second independent entity that Starbucks has bought and subsequently shut down (the first being Seattle’s Best Coffee which they bought in 2003 and shut down in 2014), does this impact the company’s ability to purchase smaller companies given their track record.
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