Starbucks Korea suffers first loss in 27 years on ‘Tank Day’ debacle
GIC owns a 32.5 per cent stake in Starbucks Korea.
Starbucks Korea experienced its first loss in 27 years following a controversial marketing campaign dubbed "Tank Day" that led to a boycott and significant criticism. SCK Company, the operator of Starbucks in South Korea, reported an operating loss of 18.4 billion won during the three months ending June 30, compared to a profit of 40.3 billion won in the same period a year earlier.
Net sales declined by 6.1% to 747.3 billion won. Despite adding 49 new stores in the quarter, the company's largest market outside the U.S. and China, the loss occurred. Starbucks launched the campaign in May, offering discounts on large "Tank" tumblers in honor of the Gwangju uprising anniversary. The US-based company called the promotion "unacceptable," and Starbucks Korea's CEO was dismissed.
The chairman of Shinsegae Group, Chung Yong-jin, apologized on television and accepted responsibility for the incident. Shinsegae, which holds a 67.5% stake in Starbucks Korea, conducted a police raid on the company's headquarters following the controversy. The company briefly closed all its South Korean stores on June 22 to train employees on modern Korean history and social sensitivity.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
