Express Catering to invest US$1.4m on Starbucks cafes
Ian Dear-led Express Catering Limited (ECL) will open three Starbucks cafes at the Sangster International Airport (SIA) in Montego Bay, a US$1.4 million investment that would form its latest drive to augment revenues at the newly listed company.
ECL, which operates more than 12 franchises, holds the rights to operate Starbucks at Sangster Airport only.
"We are really talking about three Starbucks stores in the next six months at SIA," said Dear, who indicated that the rollout will cost "US$1.4 million, which has been funded". The wider Margaritaville group, however, is part of a joint-venture partnership that has the rights to develop "Starbucks in Jamaica and a few other islands", explained Dear at the Mayberry investors forum on Wednesday at the Knutsford Court Hotel in New Kingston.
Starbucks, known as the largest cafÈ chain, operates thousands of stores globally under franchise arrangements. The Starbucks store will use coffee sourced locally and from other regions.
ECL controls the food and beverage offering at Sangster Airport beyond the passenger check-in zone. The company, which listed on the Jamaica Stock Exchange (JSE) last week, already tripled in price, from $1.50, with trades surpassing $4.50 as investors trade over 100 million units of the stock.
"We have every single offering of food and beverage (post security) at the airport. We basically have a captive market of predominantly visitors to the island," Dear said.
The company is also considering setting up shop at the Norman Manley International Airport (NMIA) in Kingston. The considerations for NMIA are contingent on a number of factors, including the concession arrangement for food operators.
"As it stands right now, we are focusing our efforts on growing the SIA. Having said that, I think there is tremendous opportunity at NMIA. They are going through their own changes there. So for me to say yes or no, I couldn't, but it is an interesting opportunity," he said.
ECL raised $490 million from an initial public offering of ordinary shares this month and listed last week on the junior market. It followed an earlier round of US$3.5 million raised in a preference offer in January to finance, in part, the planned construction of Starbucks outlets at Sangster International Airport.
The Freeport, Montego Bay-based company runs a series of eateries at Sangster Airport, including Jimmy Buffett's Margaritaville, Starbucks, Quiznos, Dairy Queen, Nathan's Famous Hot Dogs, Domino's Pizza, Auntie Anne's Pretzels, Wendy's, Cinnabon, Moe's South Western Grill, Island Deli, Viva Fresh Market Grab & Go, Cricket Sports Bar, Connections Bar, Air Margaritaville Arrivals Bar, Jamaican Bobsled Cafe, The Groovy Grouper and The Bar.
ECL's financial year wraps up annually in May. Unaudited results over 10 months ending March 2017 report US$1.15 million net profit on revenues of US$11.1 million.
VALUABLE REAL ESTATE
The company operates its various food outlets across 30,000 square feet of the airport, with plans to increase that number.
"This is valuable real estate in any airport setting," Dear said, explaining that the multiple store brands support the business model, which grew average passenger spend from US$5.95 in 2012 to current spend at US$7.30 per passenger. "We try to make sure that the tourists leave with less money in their pocket."
ECL employs 270 persons, which grows to 300 during peak periods.