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Tea Stores No Longer in the Leaves for Starbucks Future

Starbucks Plans to Close All 379 Teavana Retail Stores
July 31, 2017
Despite a strong sales quarter for its tea products, Starbucks Corp. (NASDAQ: SBUX) announced that it plans to close all 379 of its mall-based Teavana retail stores over the coming year, with the majority closing by spring 2018.

The approximately 3,300 employees impacted by the closures will receive opportunities to apply for positions at Starbucks stores. The company said it remains on track to create 240,000 new jobs globally and 68,000 in the U.S. over the next five years.

Last year, the company posted net openings of more than 1,000 stores. U.S. comp store sales increased 5%, driven by a 5% increase in average ticket.

Kevin R. Johnson, CEO of Starbucks, said the company decided to close the Teavana mall-based stores after they consistently underperformed in sales.

"We conducted a strategic review of the Teavana mall-based store business and concluded that despite our efforts to reverse the trend through creative merchandising and new store designs, the underperformance was likely to continue,” he said.

Starbucks plans to continue to sell tea in its regular stores.

"Tea is a large fast-growing category and a key addressable market and core focus for us,” Johnson added. “We expect to sell over $1.6 billion of Teavana-branded, handcrafted beverages through Starbucks stores around the world this year."

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