- The Press Trust of India -
Starbucks, which was earlier eyeing its India foray by the end of 2007, withdrew an application on July 19 to operate single brand retail stores and said it was postponing its India plans without giving a time-frame for future plans.
Coffee lovers in India may have to wait up to two years to savour the Starbucks brand, with the Nasdaq-listed world's biggest coffee retail chain revising its plan to open its first store in the country.
Starbucks, which was earlier eyeing its India foray by the end of 2007, withdrew an application on July 19 to operate single brand retail stores and said it was postponing its India plans without giving a time-frame for future plans.
However, the company's chief operating officer and international business head Martin Coles said late last night that Starbucks now planned to open its India stores in "the next year or two".
"We recently withdrew our application to enter India as we refocus our efforts in Asia Pacific, which is a key region for our company, but we remain very excited about potential of this country (India) and we plan to open that market in the next year or two," Coles told analysts at a conference call to discuss the company's third quarter results.
Starbucks reported a 20 per cent jump in quarterly revenue to USD 2.36 billion. It also announced plans to open 2,600 new stores in FY08, an increase of 200 from this fiscal's target. Its international revenue rose 28 per cent to USD 432 million in the quarter.
International store openings will accelerate while the US store openings will stabilize at 2007 levels, Coles said.
"Our International business is still in the very early stages of expansion and represents a tremendous source of growth for the company," Coles added.
Starbucks has 4,000 stores overseas, still very far from the long-term target of at least 20,000 stores outside the US, he said.
After withrawing its application last month, Starbucks said it was reviewing all options and evaluating how it will foray into one of the fastest growing economies in the world. When asked what was the time-frame Starbucks was looking at regarding its revised plan for India, a company official had earlier said it was premature to announce any new dates.
There have been reports that the decision was due to expectations of a change in regulations concerning FDI in single-brand retail, but the company did not comment on this.
At present, India allows up to 51 per cent FDI in single-brand retail.
The company had first announced its plans to enter India in 2006 and subsequently sought approval from government authorities for its proposed venture through the FDI route.
It had filed a revised application later on April 13, 2007 with a restructured equity structure nearly three months after its previous application was rejected, apparently due to foreign holding exceeding the 51 per cent cap.
In its initial application, Starbucks is understood to have proposed a partnership with its Indonesian franchise owner V P Sharma, but the proposal was rejected as Sharma's stake was considered as foreign holding since he was a non- resident Indian.
Late last month, Indian authorities told Starbucks to file a fresh application due to lack of clarity over the proposed equity structure and subsequently the company asked them to hold back its application for the time being.
The company had reportedly proposed a 51 per cent stake with Sharma and the remaining with Future Group's Kishore Biyani, but the application did not specify the direct or indirect holding with Starbucks.