Starbucks (NASDAQ:SBUX) has a thirst for premium beverages. Last year we saw a $30 million deal for the small Evolution Fresh juice company. This time around the company is aiming bigger with a $620 million acquisition of Teavana (NYSE: TEA).
The move makes more sense than it may seem at first glance. Teavana sells dozens of varieties of loose exotic teas -- and it wants you to make them at home on the tea-brewing equipment that it also sells. It's a retailer whose stores are tucked into the heart of upscale shopping malls. Starbucks, meanwhile, is a coffee house that you'll find at strip malls and busy corners.
However, Starbucks knows there's a market for premium beverages. The early game plan appears to be to offer more prepared tea beverages inside Teavana stores, and now Starbucks has another strong brand to build its tea-sipping empire around beyond Tazo.
This should work.
Briefly in the news
And now let's take a quick look at some of the other stories that shaped our week.
- Nike (NYSE:NKE) is selling Cole Haan -- its upscale shoe and handbag business -- to a private equity firm in a $570 milliondeal.
- Activision Blizzard (NASDAQ: ATVI) rolled out Call of Duty: Black Ops II on Tuesday. Last year's installment set new sales records, and the video-game industry can use a hit.
- Tesla's (NASDAQ:TSLA) Model S was named Motor Trend's "Car of the Year." This is a big deal for the all-electric car company, especially since deliveries have been slow since the Model S sedan hit the market this summer.