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The coffee chain's operator posted an 18.4 billion won operating loss in Q2, reversing a 40.3 billion won profit from a year earlier
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SCK Company, the operator of Starbucks $SBUX Korea, posted an operating loss of 18.4 billion won ($13.4 million) in the second quarter, swinging from the 40.3 billion won operating profit it earned in the same period last year and the 29.3 billion won profit it recorded in Q1 of this year. Parent company Emart, which holds a 67.5% stake in SCK Company, attributed the decline in part to fallout from a marketing controversy that drew widespread public criticism.
The trouble began when Starbucks Korea designated May 18 — the anniversary of the 1980 Gwangju Democratic Uprising — as "Tank Day" to promote a line of stainless-steel tumblers. Promotional language including "Slam on the desk" was criticized as evoking the military crackdown in which tanks and troops killed or injured hundreds of pro-democracy demonstrators. President Lee Jae Myung also criticized the campaign. Starbucks Korea pulled the campaign, and Son Jeong-hyun was removed from the chief executive role. Shinsegae Group Chair Chung Yong-jin later held a public press conference to apologize. Even after the public apology, civic groups and activists kept up demonstrations outside Starbucks locations, the company said.
