Starbucks Steps Back From Music Business
Seattle Starbucks Corp. on Thursday took a major step back from its music and book business by handing over day-to-day management of its year-old music label to Concord Music Group, as it strives to contain costs and rejuvenate its coffee-shop business.
The restructuring of Starbucks Entertainment, the small but profitable unit that oversees the chain's music and book sales, comes a little more than a year after the company unveiled its Hear Music label with various popular artists.
Ken Lombard, who oversaw Starbucks' music unit for much of its existence, is also leaving the company.
On Wednesday, the company blamed hard-hit housing markets in California and Florida for slowing sales and warned that its quarterly and 2008 profits would be below expectations.
"We are committed to examining all aspects of our business that are not directly related to our core," CEO Howard Schultz said in a statement.
Chris Bruzzo, Starbucks' chief technology officer, will assume responsibility for the entertainment division, the company said.