(Reuters) - Starbucks Corp appealed to customers for forgiveness in a controversy over racial profiling on Tuesday, saying its behavior toward two black men last month had been reprehensible as it closed 8,000 U.S. stores for anti-bias training.
The company settled privately with the two men after a Philadelphia cafe manager's call to police resulted in their arrests on April 12. It was closing 8,000 company-owned American stores at around 2 p.m. local time on Tuesday as a first step in training 175,000 employees on racial tolerance.
Analysts expect the closures, coming during the typically slow afternoon hours, would cost Starbucks $5 million to $7 million in lost business. Some 6,000 licensed Starbucks cafes will remain open in locations such as grocery stores and airports, and those employees will be trained later.
The Philadelphia arrests sparked protests and accusations of racial profiling at the coffee chain, which is known for its liberal stances on social issues such as same-sex marriage.
Starbucks Executive Chairman Howard Schultz, who crafted the chain's culture in his decades as chief executive officer, in an open letter called the manager's 911 emergency call and the subsequent arrests by police "reprehensible."
"We determined that insufficient support and training, a company policy that defined customers as paying patrons—versus anyone who enters a store—and bias led to the decision to call the police," he said.
With independent cafes proliferating and powerful rivals making assertive moves into the coffee business it dominates, analysts said Starbucks cannot afford bad publicity.
On Tuesday JAB Holdings, the private investment company of Germany's billionaire Reimann family, said it bought a majority stake in British sandwich and coffee shop chain Pret A Manger for $2 billion, expanding its reach into the coffee sector, where it also battles Nescafe and Nespresso maker Nestle.
Earlier this month, Nestle and Starbucks struck a $7 billion coffee licensing deal aimed at strengthening each company's global position.
Civil rights leaders advising Starbucks on its anti-bias training hope it will reinvigorate decades-old efforts to ensure minorities get equal treatment in restaurants and stores, setting an example for other corporations.
The move has renewed speculation that Schultz is paving the way for a U.S. presidential bid, something he has repeatedly denied. But he appeared to be more open to the idea of political office in an interview with CNN on Tuesday.
"I want to be as involved as I possibly can as a citizen to help the country," he said. "I don't know what that's going to mean in the future."
(Reporting by Lisa Baertlein in Los Angeles and Aishwarya Venugopal in Bengaluru; editing by Patrick Graham and Jonathan Oatis)
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Updated Date: May 30, 2018 00:06:14 IST