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[Saba Sports News] Basketball legend Magic Johnson is not only known for his on-court prowess but also for his successful business ventures. Recently, Johnson’s story of building 125 thriving Starbucks stores captured attention.
Despite his fame, Johnson faced challenges securing funding for his Starbucks venture. Banks turned him down multiple times, but he persisted, turning to pension funds for support. It took three years of rejection, but eventually, CalPERS provided him with $50 million, with the promise of more if successful.
With this capital, Johnson bought an inner-city shopping center for $22 million, transformed it from 40% to 100% occupancy, and sold it for $48 million, generating a $26 million profit. This success impressed the pension funds and gave Johnson access to more capital.
Next, Johnson approached Howard Schultz, Starbucks’ CEO at the time, proposing a partnership to bring Starbucks to urban America. The board agreed, and Johnson began building Starbucks stores in inner cities, catering to the preferences of the urban consumer. He replaced traditional Starbucks offerings with items like sweet potato pie, pound cake, and pecan pie, which resonated with the community. He also adjusted the music to match his customer base’s taste, featuring artists like The Weekend, Drake, Prince, and Lionel Ritchie.
Johnson’s tailored approach paid off, resulting in high per capita sales and the successful establishment of 125 Starbucks stores across more than 40 cities. In 2010, he sold his interest in the stores back to the company, reportedly making a $75 million profit. Johnson’s business acumen and diverse ventures contributed to his entry into the billionaire athletes club in 2023, alongside Michael Jordan and LeBron James.