Starbucks Plans Expansion Into Hawaii -- Joint Venture Formed With Macnaughton Group

Just three days after the much-heralded opening of its first store in Japan, Starbucks Coffee Co. has announced another expansion - this time in Hawaii.

Starbucks has formed a partnership with The MacNaughton Group, a group of Hawaii-based investors. The joint venture plans to open its first store on Oahu by year's end and to develop about 30 stores throughout the Hawaiian islands over the next three to four years.

Although terms of the joint venture were not disclosed, Starbucks is a minority partner, company spokeswoman Cheri Libby said.

The MacNaughton Group, a real-estate development company, has introduced such mainland companies as PriceCostco Kmart, Eagle Hardware and Blockbuster Video to Hawaii.

Starbucks, North America's leading retailer and roaster of gourmet coffee, has been interested in expanding into Hawaii for a few years, Libby said. As a "cross-over market" that reaches customers from both sides of the Pacific, Hawaii fit into Starbucks' strategy to expand internationally, she said.

"It fit in nicely with our Pacific Rim expansion," said Troy Alstead, Starbucks' director of international planning and finance. "The timing fit in well."

Starbucks' stock was trading at $28.375 late today, up 50 cents.

Starbucks has formed other joint ventures to expand its markets and broaden brand awareness.

The Tokyo store is a result of a joint venture between Starbucks and Sazaby, a Japanese retailer.

Starbucks also has a joint venture with Oakland, Calif.-based Dreyer's Grand Ice Cream, which began marketing coffee-flavored ice creams in grocery stores earlier this year.