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Thursday, February 5, 1998 - Page updated at 12:00 AM

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Starbucks, Johnson Join To Open Inner-City Stores

Seattle Times Business Reporter

Starbucks Coffee said today that it will team up with National Basketball Association star Earvin "Magic" Johnson to develop Starbucks stores in inner-city neighborhoods throughout the United States.

Johnson, who was at Starbucks' annual shareholders meeting in Seattle today, said the first store will open this spring in Ladera Shopping Center in Culver City, just outside Los Angeles.

Johnson, the former Los Angeles Lakers standout, did not indicate how many more stores would be built, but he said his 50-50 joint venture with Starbucks will target underserved communities throughout the country.

Johnson said negotiations between his company - Johnson Development - and Starbucks began about a year ago. Starbucks has one of the highest brand recognitions in the world for specialty coffee.

"We have been missing that in our community. We really want the best. Now we have the opportunity to have the best in our community," Johnson said.

Johnson formed his corporation in 1994 to revitalize neighborhoods and develop businesses in underserved neighborhoods.

The company has teamed with Sony Theatres to develop multiplex movie theaters around the U.S.

Many urban cities do not have a wide variety of retail choices, Starbucks Chairman Howard Schultz said. Starbucks has retail strength and experience, and Johnson's company has knowledge of underserved communities in major metropolitan areas.

One of Starbucks' most successful store openings last year, Schultz said, was the Starbucks at 23rd Avenue and South Jackson Street in Seattle's Central District.

Schultz also announced that the company will start selling its beans in Seattle-area supermarkets in the spring.

After successful test projects in Portland and Chicago, Shultz said Starbucks will expand distribution of its beans to about 3,500 supermarkets in Seattle; Los Angeles; San Francisco; Spokane; Portland; Denver; Salt Lake City; Billings, Mont.; Phoenix; and Albuquerque, N.M. He did not identify the Seattle-area stores that would sell the coffee.

The beans will sell for about $7.49 a 12-ounce bag.

Schultz has said the market for specialty coffee sold in supermarkets will be $1 billion by 2000.

Starbucks had sales of $967 million last year, primarily from its 1,500 retail stores in North America and Asia and grocery-store distribution of such products as bottled Frappuccino and Starbucks ice cream.

Lee Moriwaki's phone message number is 206-464-2320. His e-mail address is: lmor-new@seatimes.com

Copyright (c) 1998 Seattle Times Company, All Rights Reserved.

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