Starbucks loses USD 11 billion due to poor sales, boycotts
Houston: Global political tensions are spilling fast into Seattle-based Starbucks Corporation, as the company has lost approximately 11 billion dollars in value, erasing 9.4 per cent of the company's total value.
Within a span of 19 calendar-days, since its November 16 Red Cup Day promotion, shares of Starbucks have plummeted 8.96 per cent, which equates to a nearly USD11 billion loss, amid analysts' reports of slowing sales and a subdued response to the holiday season's offerings.
The boycotts at the Seattle, Washington-based chain have deep roots, touching on sensitive geopolitical issues after the company found itself in hot water following a tweet from Starbucks Workers United, the union representing many of its baristas, expressing solidarity with Palestinians.
"Amid an ongoing boycott due to the Israeli occupation's aggression against the Gaza strip, the undercurrent of discontent signals a challenging brew for the company's future," an industry analyst said.
Starbucks stocks declined for 12 consecutive stock market sessions, the longest-ever recorded streak since the company went public in 1992, and the stock currently hovers at around USD 95.80 per share, down from its yearly high of USD 115.
The company has denied wrongdoing in the scenarios but faces the challenge of maintaining its brand reputation amid divisive global issues.
In a recent call with analysts, Starbucks CEO Laxman Narasimhan said he remains optimistic about the company's diversified channels and ability to engage customers despite macroeconomic challenges and changing consumer behaviours.
The recent boycott of Starbucks comes in part of a large boycott of several global brands over their support of Israel. Starbucks in Egypt reportedly laid off workers in late November after being financially affected by the boycott - forcing it to cut expenses.
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Telangana govt rejects Adani's Rs 100 cr donation for skills university
Hyderabad (PTI): Telangana Chief Minister A Revanth Reddy on Monday announced that the state government will not accept the Rs 100 crore CSR donation committed by industrialist Gautam Adani for the Young India Skills University being set up in the state.
The CM's announcement came days after the indictment of the Adani Group chairman in a US court.
In a letter to Priti Adani, Chairperson of the Adani Foundation, the state government's Special Chief Secretary (Industries) Jayesh Ranjan said he has been "instructed by the chief minister not to seek the transfer of funds in view of the present circumstances and arising controversies".
While thanking Priti Adani for committing Rs 100 crore to the skills university, the official said the state government has so far not asked any of the donors for physical transfer of funds since the university had not received the IT exemption under Section 80 G. However, the IT exemption order has now been received recently.
Addressing a press conference here, Revanth Reddy said the decision was taken as the Congress government does not want to find itself in any unwarranted controversy amid the allegations against the Adani Group.
He said so far the Telangana government has not accepted a single rupee into its account from any organisation, including Adani Group, for the skills university being established to promote employment avenues for youth.
"I and my Cabinet colleagues do not want to be involved in unnecessary discussions and situations that would dent Telangana's image or my own," Reddy said.
Gautam Adani met the chief minister here on Octrober 18 and symbolically handed over a cheque for Rs 100 crore towards donation to the skills university.
Asked about the comments of BRS that the government should cancel the Adani Group's investment proposals in the state, Reddy said the government will have to take legal opinion for cancellation of any agreements as the other party can go to courts against unilateral termination of pacts.
On BRS working president K T Rama Rao's comments that the previous BRS regime did not allow Adani Group into the state, Reddy displayed photographs of former CM K Chandrasekhar Rao and Rama Rao with Gautam Adani to the mediapersons.
He also read out a list of Adani Group's investment proposals reportedly approved by the BRS government.
"Is he (Rama Rao) ready for a probe on these," Reddy asked.
When pointed out that the state government discussed investment proposals with the Adani Group though Congress leader Rahul Gandhi has been raising questions on Adani for several years now, he said Congress is not against any investment proposal or corporate house but crony capitalism and violation of rules.
It is his responsibility to follow his leader when the latter is raising his voice on an issue, Reddy said.
