Starbucks will close all its 379 Teavana stores over the coming year, with the coffee giant saying that the stores have been “persistently underperforming.” The move will impact about 3,300 employees.
Starbucks said that following a strategic review of the principally mall-based Teavana retail store business, it concluded that the underperformance was likely to continue despite efforts to reverse the trend through creative merchandising and new store designs.
The company made the announcement while reporting its third-quarter financial results on Thursday.
The majority of the Teavana stores will close by Spring 2018. The approximately 3,300 partners impacted by these closures will receive opportunities to apply for positions at Starbucks stores, as Starbucks said it remains on track to create 240,000 new jobs globally and 68,000 in the U.S. over the next five years.
Starbucks noted that the wider third-quarter operating loss in its “All other segments” was primarily due to the goodwill and asset impairment charges as a result of the company’s strategy to focus on Teavana tea within Starbucks stores.
In September 2016, Starbucks had said it launched its new tea line Teavana in the whole Asia region after it was introduced in China.
Through this $1.3 billion acquisition, the largest single acquisition in the company’s history, Starbucks will assume 100 percent ownership of approximately 1,300 Starbucks stores in 25 cities in the Shanghai, Jiangsu and Zhejiang Provinces.
Starbucks also said Thursday that it plans to consolidate its business operations across Mainland China by acquiring the remaining 50 percent share of Shanghai Starbucks Coffee Corporation that it did not already own from JV partners Uni-President Enterprises Corporation or UPSC and President Chain Store Corporation or PCSC.
Concurrently, UPEC and PCSC will acquire Starbucks 50 percent interest in President Starbucks Coffee Taiwan Limited and assume 100 percent ownership of Starbucks operations in Taiwan for about $175 million.
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