Starbucks Coffee International, a wholly owned subsidiary of Starbucks Coffee Company (Nasdaq:SBUX), and the KarstadtQuelle Group, Europe’s largest department store and mail order company, today signed a joint venture agreement to open Starbucks retail locations in Germany. The first store is scheduled to open in Berlin, in early spring 2002.

“KarstadtQuelle and Starbucks, two companies with strong brands and excellent business expertise, are ideal partners. We welcome this alliance whole-heartedly,” said Wolfgang Urban, Chairman of the Management Board of KarstadtQuelle AG. “Starbucks is the brand with the highest potential in the specialty coffee sector in the world. Together with the specific group know-how of KarstadtQuelle – particularly in the catering field – we are utilizing synergies and achieving enormous earning power for both companies.”

Urban said further that the two complementary concepts growing together in one company, would have an inspirational effect, both on customers and on the German market. Customers will receive premium-quality, localized products in a unique and sophisticated environment. At the same time, the German market will benefit from this potential for growth and the creation of many new jobs, Urban said. “Furthermore, we are making a clear statement regarding the cultural effects, which will have a positive impact on the group,” said Wolfgang Urban.

In addition to Germany, Starbucks recently announced its plans to open its first store in Vienna, Austria, by the end of this year. Prior to announcing Germany and Austria, Starbucks entered its first continental European market, Switzerland, earlier this year, opening its first store in Zurich on March 7. As of today, Starbucks has opened a total of six stores in Zurich, Basel and Bern.

“Germany represents one of the major strategic continental European markets for Starbucks,” said Peter Maslen, president of Starbucks Coffee International. “We are extremely pleased with this significant development in our expansion plans for the region. Our continued strong performance in continental Europe has been a key influence in driving our plans for Germany.”

KarstadtQuelle AG is Europe’s largest department store and mail order group.

The group’s business segments include over-the-counter retail trade, mail order, services and tourism, and real estate.

Starbucks Coffee Company is the leading retailer, roaster and brand of specialty coffee in the world, with more than 4,600 retail locations in North America, the United Kingdom, continental Europe, the Middle East and the Pacific Rim.