Taste Holdings bought the franchise rights to US-based coffee house Starbucks for an undisclosed amount last year, and Taste said Starbucks had exceeded expectations since the first outlet was opened in April. But the capital-intensive investment in the global franchise has put the group under strain. Taste Holdings' reported loss for the six months to August rose by 16% to R34.4-million. Byron Lotter, a portfolio manager at Vestact, said Starbucks' brand strength would enable it to beat market expectations, but investors would have to be patient as they were not going to see rewards immediately. "Like we've seen with Burger King and Grand Parade, the individual stores are successes but they [Taste Holdings] are using money from one store to open another, so we are not going to see the fruits for a while," said Lotter. Taste Holdings has borrowing and bank overdrafts of almost R300-million, but in its four months of trading the Starbucks brand managed to wring a combined revenue of ...
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