Shake Shack is partnering with Sazaby League, the very same company and leadership that brought Starbucks Corp. (NASDAQ: SBUX) to Japan and grew the brand into one of its largest international markets to date.
Starbucks Japan was a joint venture between Starbucks and Sazaby League that operated Starbucks-branded retail stores in Japan. Starbucks stores were represented as having performed consistently despite ongoing macroeconomic challenges in Japan.
Keep in mind that Starbucks has a literal empire of stores across the world, and that it has a tested and proven business model, in terms of years of growth in the market. Shake Shack is still in its infancy in terms of being a public company, and its current reach in terms of its stores pales in comparison to that of Starbucks.
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Randy Garutti, CEO of Shake Shack, said:
We are absolutely thrilled to bring our first Shack to Tokyo. For years, a tremendous amount of fans have asked us when we would come to Japan. We are incredibly honored to partner with SAZABY LEAGUE, a world-class, proven operator with over forty years of expertise including tremendous success leading Starbucks’ first international venture. We are truly humbled to become a part of Japan’s thriving food scene.
It is worth noting that shares hit post-IPO lows in Tuesday’s trading session, and that these lows have subtly been trending down.
Following news of the expansion, the stock promptly dropped 3.4% to $39.31 midday in Tuesday’s trading session. The stock has a consensus analyst price target of $21.00 and a post-IPO trading range of $38.63 to $52.50.
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