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Starbucks Explores New Ownership for MENA Franchises
In an exclusive report by Reuters, coffee giant Starbucks is currently in discussions to transfer a portion of its franchise rights in the Middle East, North Africa, and Central Asia to US investment firm Apollo Global Management.
Presently, the Kuwaiti conglomerate Alshaya oversees nearly 2,000 Starbucks establishments across 13 countries within the aforementioned regions, boasting a substantial presence particularly in Morocco. Alshaya has been actively exploring avenues to divest its 30% stake in these franchises, valued at an estimated $4-5 billion.
Starbucks CEO, Laxman Narasimhan, has acknowledged the company's encounter with "headwinds" in the Middle East, attributed to backlash over perceived support for Israel amidst the ongoing conflict in Gaza, which has consequently impacted regional sales.
Speculation arose last year regarding the potential exits of Starbucks and H&M from the Moroccan market, where both brands are managed by Alshaya. While H&M indeed ceased operations, Alshaya has reaffirmed its commitment to Morocco, continuing to operate Starbucks cafes across the country.
The contemplation of selling off the MENA franchises signals Starbucks' quest for new ownership and strategic direction in this volatile yet rapidly expanding market. The implications of potential new leadership on operations, particularly in key markets like Morocco, remain to be observed.