Approximately 600 Underperforming Stores will be Closed
Company takes Significant Step toward Improving Long-Term Profitable
Growth
Starbucks Corporation (NASDAQ: SBUX) has announced the next step in its
multi-faceted plan to transform the company, with a decision to close
approximately 600 underperforming company-operated stores in the U.S.
market. This decision is a result of a rigorous evaluation of the U.S.
company-operated store portfolio and includes the 100 stores targeted
for closure in the company’s previously
announced plans. In addition, Starbucks now expects to open fewer than
200 new U.S. company-operated stores in fiscal 2009.
The majority of the store closures are scheduled to occur during the
remainder of fiscal 2008 and the first half of fiscal 2009. The timing
of the closures is dependent on finalizing third-party agreements, and
is therefore subject to change. Both full-time and part-time retail
positions will be eliminated, however the company expects to place many
of the affected partners (employees) into available positions at nearby
Starbucks stores.
“In January, we committed to transforming the
company through a series of critical and strategic initiatives to
improve the current state of our U.S. business and build the business
for the long term,” stated Howard Schultz,
chairman, president and ceo. “Our executive
and field leadership teams conducted an extensive review of our U.S.
company-operated store portfolio with a goal of enabling our
organization to focus its efforts on locations where we can more
effectively improve the customer experience.”
“Throughout the history of the company, we
have always aspired to put our people first. This makes our decision to
close stores difficult, because it is disrupting the lives of the people
who have worked so hard to deliver superior service to our customers,”
Schultz continued. “We sincerely thank each
one of them and are very proud of their many contributions to the
company. At the same time, we recognize that it is necessary to make
decisions that will strengthen the U.S. store portfolio and enable us to
enter into fiscal 2009 focused on enhancing operating efficiency,
improving customer satisfaction and ensuring long-term value for our
partners, customers and shareholders.”
The stores identified for closure are spread across all major U.S.
markets with approximately 70 percent of them opened since the beginning
of fiscal 2006.
