Daily Archives: January 28, 2009

Gee I can’t imagine why Starbucks is laying off personnel. Wall Street has been laughing at this company for years for opening up a Starbucks on every corner. I predict bankruptcy within the year. Besides, a person would have to be a fool to pay five dollars at a Starbucks for what they can get for a dollar fifty at the local 7-11. JD

Jan. 28 (Bloomberg) — Starbucks Corp., the world’s largest chain of coffee shops, said it will cut 6,700 jobs and close 300 more stores after reporting first-quarter profit that fell more than analysts estimated.

The company plans to close 200 locations in the U.S. and 100 overseas, in addition to the 600 Starbucks said it would close last year. The workforce reduction will eliminate 6,000 café positions and 700 corporate jobs, the Seattle-based chain said today in a statement.

Chief Executive Officer Howard Schultz warned in December that Starbucks’ profit would be less than analysts’ estimates at the time as sales in established stores worsened in November. Customers pinched by job losses and falling home prices are cutting back on premium coffee. The firings and closings announced today further accelerate Schultz’s plan to trim costs.

Schultz also asked the board to cut his annual base pay to less than $10,000, or the minimum required to maintain benefits for him and his family, spokeswoman Deb Trevino said today in a telephone interview. His base pay was about $1.2 million in 2008. Starbucks is also selling a corporate jet, bringing the fleet to one plane following a similar sale late last year.

“The only grown-up attitude and thing for them to do in this environment” is to adjust to the declining revenue, Sharon Zackfia, an analyst with William Blair & Co. in Chicago, said today in a Bloomberg Television interview. “You have to give this company credit for coming up with ways to bolster their margin even though same-store sales are down.”

Trimming Expenses

The additional measures increase the company’s plan to trim costs by $100 million this year, to at least $500 million, Starbucks said. Starbucks may save more next year as the store closings take effect, Chief Financial Officer Troy Alstead said on a conference call.

Sales at U.S. stores open at least 13 months dropped 10 percent in the first quarter. The company had a total of 16,875 stores, including franchised locations, as of Dec. 28.

“The pace of weakening in the business environment and the global economy has been accelerating,” Schultz said on the conference call today. “I’m far from pleased with our performance this quarter and I anticipate that our results could remain under pressure until the economy begins to recover.”

Starbucks rose 50 cents to $9.65 today in Nasdaq Stock Market composite trading. The stock has lost 51 percent in the past 12 months.

‘Slow Drip’

The coffee seller in July said it would close 600 company- operated stores in the U.S. and 61 shops in Australia. The move slashed 12,000 café positions, although about 70 percent of workers were able to transfer to nearby locations, resulting in about 3,600 jobs lost.

Net income dropped 69 percent to $64.3 million, or 9 cents a share, from $208.1 million, or 28 cents, a year earlier, the company said in the statement. Sales fell 5.5 percent to $2.6 billion in the period ended Dec. 28.

Excluding some restructuring costs, profit was 15 cents a share. The average of 16 analyst estimates compiled by Bloomberg was for profit of 17 cents a share on sales of $2.71 billion. The company doesn’t give quarterly forecasts.

The store closings announced last year are still being implemented, and the shutterings announced today will be carried out through the year that ends in September, Starbucks said. Half of the corporate cuts announced today will come from Seattle.

“I’m hoping 300 stores is enough, and that they’ve done what they need to do,” said Patty Edwards, a retail analyst with Storehouse Partners in Seattle. “Slow drip, even in coffee, isn’t necessarily the best thing. Sometimes you just need to get the pain over with.”

The distraught California dad who wiped out his family before killing himself said in a suicide note the mass murder was his wife’s idea.

“After a horrendous ordeal, my wife felt it better to end our lives and why leave the children in someone else’s hands,” Ervin Lupoe wrote in the note he faxed to a Los Angeles TV station.

After typing his name, Lupoe printed an anguished postscript: “Oh Lord my God is there no hope for a widow’s son?”

The letter, which appeared on the KABC-TV Web site Wednesday, reveals the writer clearly did not think so.

It also shed more light on why Lupoe shot his wife and kids execution style in the heads before shooting himself.

Lupoe was despondent because he and his wife were canned from their jobs as X-ray technicians at Kaiser Permanente West Los Angeles Medical Center.

He began his “tragic story” by introducing himself and his doomed spouse, Ana.

Then he listed their kids and their ages: Brittney, 8; twin daughters Jaszmin and Jassely, 5; and twins boys Benjamin and Christian, both “2 yrs 4 mo.”

“My wife and I were being investigated for misrepresentation of our employment to an outside agency,” Lupoe continued.

In a pre-Christmas questioning, Lupoe claimed an administrator told him: “You should not even had bothered to come to work today you should have blown your brains out.”

“It seems Kiaser (sic) Permanente want’s (sic) us to kill ourselves and take our family with us,” he wrote.

Kaiser Permanente confirmed the couple was fired “after an internal investigation” but gave no details. “We are confident that no one told him to take his own life or the lives of his family,” the statement said.

KABC-TV called the cops when they got the fax, which arrived around the time police dispatchers got a call from a man who said, “I just returned home and my whole family’s been shot.”

Police suspect the caller was Lupoe, who was found dead with a revolver by his side Tuesday at his home in Wilmington, a suburb wedged between the ports of Los Angeles and Long Beach.

The sight of so much carnage horrified even the most hardened police officers, witnesses said.

“The reaction on their faces was not a pretty sight,” neighbor Jasmine Gomez told CNN. “There was an officer who came out of the house throwing up.”

It was the fifth mass death of a family by murder or suicide in California – a state hit hit by the recession and mortgage meltdown – since last February.

Wilmington California

The local story on this Ervin Lupoe is that he and his wife both worked for Kaiser Permenente in Los Angeles. For those of you that don’t know, Kaiser Permenente owns their own hospitals and from what I understand the work environment is compared to working at Walmart where the employee is treated poorly and the hours can be exhausting. Apparently Mr. and Mrs. Lupoe had both worked for Kaiser and were recently fired for some sort of fraud.

The Lupoe’s had recently added onto their house to make room for their growing family and were deeply in debt. The Lupoe’s had pulled their kids out of school three weeks ago and told the school they were moving to Kansas. It hass not been confirmed as of yet but it seems as if Mrs. Lupoe was in on this murder suicide pact with Mr. Lupoe. I heard this morning on the news that they “didn’t want to burden anyone with raising their children.” What a sad story. I cannot imagine doing harm to my own children under any circumstances. JD

A man in California murdered his five children and wife before committing suicide after losing his job, police officials said. The seven bodies of the family were found in the Los Angeles neighborhood of Wilmington on Tuesday after police were notified after the man threatened to kill his family and himself in a fax sent to a local TV station.

According to preliminary reports, a local TV station received a fax in which a man threatened to kill his family and himself. The station then immediately notified the police, who found the seven bodies in the family’s Wilmington home. The fax allegedly mentioned the man had just lost his job in a hospital.

The man reportedly also called 911 and told the operator that his family was dead before killing himself.

The police said the child victims were an eight-year-old girl, five-year-old twin girls and two-year-old twin boys.

Los Angeles mayor Antonio Villaraigosa spoke at a news conference about the tragedy, saying the man who killed his family had recently lost his job and the desperation put him over the edge.

“Unfortunately, this has become an all too common story in the last few months but that does not, and should not, lead people to resort to extreme measures. Help is available. Resources exist,” the mayor said.

A similar tragedy in relation to the recession occurred last October when a financial adviser in Los Angeles killed his wife, three sons, his mother in law and himself after losing his private fortune due to falling market shares.