PROSPERING DURING THE SLUMP
The company nicely finesses social- responsibility issues of labor, fair trade, farming, and environment and deflects any suspicions of corporate misbehavior by invoking the image of the little store that could. Last week, as union workers were demonstrating in U.S. cities over a new apron-and-linen-service contract Starbucks signed with a company accused of harassing and illegally firing its workers, Starbucks announced it was "reconnecting customers with the sweet nostalgic flavor of malt" by introducing two new Frappuccino blends. Co-founder Bowker doesn't begrudge his former company's success. But he allows that if he and Siegl had not sold the company, "It would certainly be different today." Frankly, he says, "I try not to think about it. It's not for reasons of greed or anything like that. But we had something totally different in mind when we created Starbucks."
What Schultz had in mind has prospered even in a slumping economy, earning $954 million in the first quarter ending March 30, a stunning 22 percent increase from the same period a year ago. Its stock has split two-for-one four times and hovers around a strong $25. And the public corporation has suffered no Enron-style accounting sleight-of-hand. With 68,000 full- and part-time employees, most of whom get health, stock, and retirement benefits at one of Fortune's 100 Best Companies to Work For, it considers itself a responsible big corporation with an economic and charitable commitment to its far-flung communities. Starbucks has donated $5 million to U.S. literacy programs and doled out thousands in grants to aid low-income at-risk youths, including the after-school writing and athletics program, SCORES.
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Schultz: visions of a one-bean world?
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The company tries not to look as arrogant as it is big, but there are public relations mishaps along the way. Last Wednesday, Schultz was scheduled to be inducted into the SCORES Hall of Champions in a ceremony at Experience Music Project, preceding a SCORES benefit appearance by the Rock Bottom Remaindersthe all-author, frustrated-musician band that includes frontman Dave Barry, keyboarder Mitch Albom, singer Amy Tan, and, in a fright wig, warbler Scott Turow. Basketball legend Bill Russell flew in from the NBA playoffs in New Jersey that morning to give Schultz the award, then flew out that night to Boston. It was a big deal. But Schultz was a no-show. "Howard wishes he could be here," apologized stand-in Dave Pace, Starbucks executive vice president. "He's actually in Europe tonight."
Nevertheless, Pace said, "This is a very, very special program to us. By the end of this year, the Starbucks Foundation is going to have contributed over $500,000 to America SCORES and, more importantly, thousands of volunteer hours from people in our company." The applause was hearty. No gripes this night about Starbucks, or even the complimentary Charbucks being served. Probably no one but me noticed there are two Starbucks within two minutes walking distance. Yeah, I timed it.
randerson@seattleweekly.com
