Starbucks Korea Reports First Quarterly Loss in 27 Years

SCK Company Co., the operator of Starbucks in South Korea, reported an operating loss of 18.4 billion won for the quarter ending in June. This marks the company's first quarterly loss in 27 years, following a widespread public boycott and criticism from President Lee Jae Myung.

The financial decline stems from a May marketing campaign called Tank Day, which offered discounts on Tank tumblers on the anniversary of the 1980 Gwangju uprising. The promotion drew intense backlash because the military used tanks to suppress pro-democracy protesters during that event. In response, the company dismissed its chief executive, and Chairman Chung Yong-jin issued a televised apology.

To address the controversy, the company closed all 2,000-plus stores for one day on June 22 to provide employees with training on Korean history and social sensitivity. Police recently raided the company's Seoul headquarters as part of an investigation into the marketing campaign. The U.S.-based parent company, Starbucks, described the campaign as unacceptable.