(Reuters) - Restaurant Brands New Zealand Ltd (RBD.NZ) said on Monday it would not renew its license deal with Starbucks Corp (SBUX.O) when it expires in October.
Customers pass by the logo of an American coffee company Starbucks inside a coffee shop in Rio de Janeiro, Brazil August 15, 2018. REUTERS/Pilar Olivares
The fast-food company said in a statement it had sold fixed assets and stock related to its deal with Starbucks Coffee International, Inc to New-Zealand based Tahua Capital for NZ$4.4 million ($2.9 million).
Restaurant Brands intends on focusing on its core businesses of quick-service restaurant brands and said the Starbucks Coffee business was “becoming less relevant to the company’s overall direction”.
The firm said the exit from its Starbucks Coffee business, which contributes less than 4 percent of its total sales and profits, was expected to have an impact on the current year net profit (excluding non-trading items) of about NZ$1.3 million.
Tahua Capital, established specifically to buy the assets of Starbucks New Zealand, will secure leases for Restaurant Brands’ 22 Starbucks stores, and will employ all 300 current Starbucks employees.
The deal is expected to settle in late October, Restaurant Brands said in a statement.
Reporting by Karthika Suresh Namboothiri in Bengaluru; Editing by Peter Cooney
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