a South Rock Capitalwhich is the company that manages Starbucks – The world’s largest café chain – along with Subway, Eataly, TGI Fridays and Brazil Airports Restaurants – is trying – despite the financial crisis – to maintain its operations on Brazilian soil.
With one Debts are estimated at 1.8 billion Brazilian realsThe company filed a judicial recovery request on October 31. A day later, Judge Leonardo Fernandez dos Santos, of the First Judicial Bankruptcy and Recovery Court of the São Paulo State Court of Justice (TJ-SP), rejected the application.
The recovery process is still under analysis. However, in a decision issued on Tuesday the 7th of last month, the judge – the same judge who denied the first request to consider the company’s general justification – granted urgent relief to SouthRock Capital. A guardianship temporarily protects a portion of assets.
Given this complex situation, many may wonder: Will Starbucks close its doors and leave Brazil? Hey Land I prepared some questions and answers about the brand crisis in Brazil. The company stated that its total monthly revenues amount to 50 million Brazilian reals.
When was South Rock born?
The operator was established in 2015 and is working to expand into international and local brands. Brazil’s first airport restaurant stores opened in 2017 in airports across the country. In 2018, it began operating the Starbucks coffee chain and snack bar TGI Fridays.
In 2022, SoutRock became responsible for Subway, a fast food franchise with more than 1,600 units in Brazil. This has become the largest food and beverage company in the country, according to the company’s website. In the same year, it also entered into a partnership to operate and expand the Italian gastronomic center Eataly.
Will Starbucks close its doors in Brazil?
It is not known yet, as the company has not spoken about the matter. However, although the court has not yet accepted SoutRock Capital’s request, the judicial recovery is working to prevent the financially distressed company from closing its doors. It is a process through which the debtor company obtains a period of time to continue operating while negotiating with its creditors.
Why did the company file a judicial recovery request?
The judicial recovery process aims to provide financial protection for the company’s operations in Brazil, which are facing a series of financial problems.
The Brazilian economy, the Covid-19 pandemic, the continued decline in sales in 2021 and 2022 and difficulties in obtaining working capital from financial institutions were the reasons expressed by the operator for the crisis that hit SouthRock Capital.
What is the value of the company’s debt?
SouthRock has filed for bankruptcy protection with Debts are estimated at approximately 1.8 billion Brazilian reais. Banco do Brasil, Santander, medium-sized banks, such as Modal, Sofisa and ABC Brasil, as well as companies that securitize assets, such as Virgo, are among the largest creditors, the report said. Broadcast/Estadão.
How many Starbucks stores have closed in the country?
Several Starbucks stores closed amid a restructuring of the operation that was already underway and ended up being accelerated by SouthRock seeking protection in court against creditors.
The company did not reveal a specific number, but the list of creditors includes more than 40 eviction lawsuits from Starbucks stores in several shopping centers in Brazil, such as Blumenão, Campinas, Canoas and Rio Grande do Sul.
Source: Redacao Terra
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