Starbucks Reorganizes Entertainment Division24 Apr, 2008 By: Erik Gruenwedel
Citing cost concerns, Starbucks Coffee Company April 24 said it is reorganizing its entertainment division to focus on digital music distribution and books.
The Seattle-based coffee retailer said Ken Lombard, president of Starbucks Entertainment, had left the company to pursue other interests.
Los Angeles-based Lombard was instrumental in Starbucks becoming involved in theatrical and DVD distribution, including the 2006 co-production Akeelah and the Bee with Lionsgate and Arctic Tale with Paramount last year.
“As part of our ongoing transformation, we are committed to examining all aspects of our business that are not directly related to our core,” said Howard Schultz, chairman, president and CEO, in a statement.
Chris Bruzzo, chief technology officer, has been promoted to SVP and will assume leadership of the entertainment category as part of his responsibilities.
Starbucks said it would maintain business relationships with Apple, AT&T and the William Morris Agency, the latter primarily for book projects.
Starbucks is under pressure to reduce costs. The company this week lowered second-quarter earnings projections and said fiscal-2008 earnings would be lower than expected.
Starbucks shares closed April 24 down more than 10% to $15.99 per share.