The Starbucks coffee shop chain, in Shopping Cidade, in the center of BH, is closed. Employees of establishments close to the store say that the doors have not opened since Tuesday (10/31), when its parent company, SouthRock, filed for bankruptcy protection.
In the document sent to the 1st Bankruptcy Court of São Paulo, the group states that its total debts are R$1.8 billion.
On the grille of the unit in the Center of BH there is a message: “Dear customer, this store will not open today. Thank you for understanding.”
In conversation with the report, a saleswoman who works in a nearby store said that the report has been there since last week and that rumors are that the unit will no longer open. When asked whether the owner of the café has already communicated about the definitive closure of the store, Shopping Cidade management has not yet responded.
In another unit, at Boulevard Shopping, in the Eastern Region of BH, the cafeteria operated normally. The employees, however, did not want to talk about the matter. The manager explained that all units in BH belong to SouthRock, a company based in São Paulo and that she was not authorized to grant interviews.
Starbucks Brasil lost the right to use the brand in the country due to late payment provided for in the licensing agreement. The notification arrived on October 13 of this year, amid contract renegotiation negotiations, and put the activities of the group that also controls Subway and Eatlay in the country at risk.
The controller of the coffee shop chain was contacted to inform how many units there are in BH and Minas and how many employees work in each of them, in addition to the impacts of the recovery request. In a statement, SouthRock said it has no additional information to share at this time, beyond the note already released. (Read in full below).
The company claims that “it remains committed to defending its mission and values, while entering a new phase of challenges, which requires the restructuring of its business to continue protecting the brands it is proud to represent in Brazil, its Partners (collaborators ), consumers and their store operations.”
And he also highlighted that the restructuring process has already begun and that “adjustments to the brands include reviewing the number of operating stores, the opening calendar, alignments with suppliers and stakeholders, as well as its workforce as it is currently organized .” While the structural adjustments are implemented, the company said that “all brands will continue to operate and deliver exclusive products.”
Subway does not enter into judicial recovery
The Subway burger chain is not part of SouthRock’s bankruptcy filing. According to the controller, “due to a business decision, taken together with its commercial partners, the Subway brand is not part of the order.” This way, franchisees would not have their businesses affected.
Bruno Amaral, operational manager of a group of 24 brand franchisees in BH
They are completely different operations. SouthRock controls the operation of all brands, but the actual operator is the franchisee. The recovery does not affect Subway in any way. We have negotiations with the suppliers themselves.
He says that, unlike its parent company, Subway is in great shape. “Sales are going well, it doesn’t impact anything.” The manager says that the only burden at the moment is the rumors. “It affects the team, employees ask. But we have already explained to everyone (about the situation). We are actually coming off a very good month.”
Read the full SouthRock note:
“Over the past three years, since the COVID-19 pandemic drastically transformed the lives of everyone around the world, countless businesses, including retailers, have been seen struggling to maintain their operations. The economic challenges in Brazil resulting from the pandemic, inflation and continued high interest rates have compounded the challenges for all retailers, including SouthRock.
In this scenario, SouthRock remains committed to defending its mission and values, while entering a new phase of challenges, which requires the restructuring of its business to continue protecting the brands it is proud to represent in Brazil, its Partners ( employees), consumers and the operations of its stores.
SouthRock’s restructuring process has already begun, with the support of external consultants and stakeholders. However, the work must continue, so SouthRock requested, today, Judicial Recovery to financially protect some of its operations in Brazil linked to strategic decisions to adjust its business model to the current economic reality.
Due to a business decision, taken together with its commercial partners, the Subway brand is not part of the Judicial Recovery request. In relation to the other brands in the company’s portfolio, including Starbucks, SouthRock continues to operate them in the Brazilian market.
Adjustments to the brands include reviewing the number of operating stores, the opening calendar, alignments with suppliers and stakeholders, as well as its workforce as it is currently organized.
These decisions are made to ensure that the company is prepared to navigate the current economic cycle, as they reinforce SouthRock’s commitment to ongoing business, its social and corporate responsibility and to all parties involved amidst the volatility of the Marketplace.
While these structural adjustments are implemented, all brands will continue to operate and deliver the exclusive products and unique experiences that each offers to consumers who visit their stores every day.
SouthRock remains committed to continuing to work closely with its commercial partners to create the necessary conditions to continue developing and expanding all of its brands in Brazil over time.”