Schultz was born to a Jewish family on July 19, 1953 in Brooklyn, New York,
the son of ex-United States Army trooper and then truck driver Fred
Schultz, and his wife Elaine. As Schultz's family was poor, he saw an
escape in sports such as baseball, football, and basketball, as well as the
Boys and Girls Club. He went to Canarsie High School,
from which he graduated in 1971. In
high school, Schultz excelled at sports and was awarded an athletic scholarship
to Northern
Michigan University –
the first person in his family to go to college. A member of Tau Kappa Epsilon, Schultz received his
bachelor's degree in Communications in 1975.
After graduating, Schultz
worked as a salesperson for Xerox Corporation and was quickly promoted to a full
sales representative. In 1979 he
became a general manager for Swedish drip
coffee maker manufacturer, Hammarplast, where
he became responsible for their U.S. operations with a staff of twenty. In 1981, Schultz visited a client of
Hammarplast, a fledgling coffee-bean shop called Starbucks Coffee Company in
Seattle, curious as to why it ordered so many plastic cone filters. He was impressed with the company's
knowledge of coffee and kept in contact over the next year, expressing interest
in working with them. A year later, he joined Starbucks as the Director of
Marketing. On a buying trip to Milan, Italy for
Starbucks, Schultz noted that coffee bars existed on practically every street.
He learned that they not only served excellent espresso, they also served as meeting places
or public squares; they were a big part of Italy's societal glue, and there
were 200,000 of them in the country.
On his
return, he tried to persuade the owners (including Jerry Baldwin) to offer
traditional espresso beverages in addition to the whole bean coffee, leaf teas
and spices they had long offered. After a successful pilot of the cafe concept,
the owners refused to roll it out company-wide, saying they didn't want to get
into the restaurant business. Frustrated, Schultz decided to leave Starbucks in
1985. He needed $400,000 to open the first store and start the business. He
simply did not have the money and his wife was pregnant with their first baby.
Jerry Baldwin and Gordon Bowker offered to help. Schultz also received $100,000
from a doctor who was impressed by Schultz’s energy to “take a gamble”. By
1986, he raised all the money he needed to open the first store 'Il Giornale'
after the Milanese newspaper. Two years later, the
original Starbucks management decided to focus on Peet's Coffee &
Tea and sold its Starbucks
retail unit to Schultz and Il Giornale for $3.8 million.
Schultz
renamed Il Giornale with the Starbucks name, and aggressively expanded its
reach across the United States. Schultz's keen insight in real estate and his
hard-line focus on growth drove him to expand the company rapidly. Schultz did
not believe in franchising, and made a point of having
Starbucks retain ownership of every domestic outlet.
On 26
June 1992, Starbucks had its initial public offering and trading of its common
stock under the stock ticker NASDAQ-NMS: SBUX. The offering was done by Alex,
Brown & Sons Inc. and Wertheim Schroder & Co. Inc.
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