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Kuwait’s Alshaya delays Starbucks franchise stake sale

By Pramod Kumar
Alshaya Group, one of the Gulf’s largest franchise owners, is expected to resume discussions about Starbucks next year if the situation improves Unsplash/Asael Peña
Alshaya Group, one of the Gulf’s largest franchise owners, is expected to resume discussions about Starbucks next year if the situation improves

Kuwait’s Alshaya Group is “not in a hurry” to sell a stake in its Starbucks regional franchise due to the ongoing geopolitical unrest and boycotts, which is affecting its valuation, according to a news report.

Discussions are expected to resume next year “if the situation improves”, Reuters reported, citing informed sources.

The company, one of the Gulf’s largest franchise owners, was to sell up to a 30 percent stake in the company, aiming to raise $4 billion-$5 billion in June 2022.

Shortlisted bidders included Saudi Arabia’s Public Investment Fund and US private equity firm Apollo Global Management.

Alshaya and Starbucks declined to comment, the report said.

In January, Alshaya confirmed a pullback in Egypt, including “a reduction in the number of stores”. Bloomberg reported that about 60 stores would be closed, leading to around 375 layoffs.

The group cut jobs at its Starbucks outlets across the Middle East and North Africa in March amid calls for a boycott since the start of the Gaza conflict.

The Kuwaiti retailer operates 70 brands in 4,000 stores across 18 countries. It has been running the Starbucks brand for over 25 years and has 1,300 coffee shops and 11,000 staff in 17 countries.

Americana Restaurants International, which runs 2,435 outlets across the region covering brands such as KFC, Hardee’s, Pizza Hut, TGI Friday’s and Krispy Kreme, is another to have suffered at the hands of the ongoing boycotts.

The company reported a 15 percent year-on-year drop in revenues in the last three months of 2023, with profit nearly halved in the same period.

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