Starbucks to close 500 more US stores....no way both downtown locations make it

[jaxtrader]

      
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Starbucks to Close More Stores
By JANET ADAMY
July 1, 2008 5:29 p.m.

In its most significant pullback yet to its U.S. expansion, Starbucks Corp. said it will close an additional 500 U.S. stores and cut 7% of its work force.

The move effectively ends Starbucks' era as a break-neck growth company, one that blanketed the country with about 11,000 locations nationwide since the late 1980s. It's also a sign that the specialty coffee business is taking a troubling turn just as mainstream companies like McDonald's Corp. are beginning to invest heavily in it.

Starbucks said the 500 locations, as well as 100 others it slated for closure earlier this year, will shut down during the remainder of this year and the early part of next year. The company said as many as 12,000 full-time and part-time retail positions will be eliminated with the store closures.

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05/01/08The Seattle coffee giant did not give details on where the stores are but said they are spread across all major U.S. markets and that about 70% of them have opened since the fall of 2005. Starbucks is closing locations that are either not profitable now or are not projected to provide acceptable returns on the investment in the future, the company said.

Throughout this decade, Starbucks opened hundreds of locations across the country to boost sales growth and siphon traffic from stores where long lines were driving away customers. The density of Starbucks in places like New York and other large cities turned the chain into a ubiquitous American symbol, spawning countless jokes about the chain's prevalence.

But last year, as Starbucks sales began to soften, it became clear that the company's growth was cannibalizing its sales in a way that was threatening the chain's success, as well as causing the quality at existing locations to slip. Analysts have said that Starbucks lowered the bar on selecting new locations in recent years.

"We recognize that it is necessary to make decisions that will strengthen the U.S. store portfolio," Starbucks Chief Executive Howard Schultz said in a statement.

Starbucks has been struggling to lure customers amid a slowdown in consumer spending and increasing competition from other coffee and restaurant chains. Mr. Schultz took over in January to revive the company, whose stock lost about half its value in the year before his return, but the company's shares have yet to rebound. He has been speeding through changes, including introducing a new daily brewed coffee that has helped boost Starbucks' drip coffee sales but has alienated a small group of loyal Starbucks customers.

The store closures are likely to please Wall Street, which has called for more store shutdowns and swifter spending cuts. Next fiscal year, the company plans to open fewer than 200 company-owned locations in the U.S., down from its earlier forecast of 250 locations. Starbucks has said that it is shifting some of that growth overseas, where markets are more promising.

Write to Janet Adamy at janet.adamy@wsj.com

RELATED ARTICLES FROM ACROSS THE WEB
Related Web News
•  Starbucks pulling plug on 600 U.S. stores  Jul. 01, 2008  marketwatch.com
•  Starbucks closing 600 stores in the US  Jul. 01, 2008  npr.org
•  Starbucks to cut as many as 12,000 positions  Jul. 01, 2008  news.yahoo.com
•  Starbucks to close 600 U.S. stores  Jul. 01, 2008  nbc.com
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Edit: I just deleted the dead space.

[jaxtrader]

Agree that 11E  is far nicer than the Landing...I wasn't aware they had such a good deal on the rent ..that might be a game changer

[Driven1]

My guess is the one with free rent will stay.
11 east.

Or at least I really hope so.
The space is awesome and the staff ties with San Marco as the best in the city

i think the best is St Aug Rd & San Jose Blvd intersection (also the most volume in the city).  2nd is a tie between Hodges/JTB and Roosevelt Mall on 17.

[Seraphs]

The 11E location is awesome.  Hope it stays!

[blizz01]

Hmm - I'd bet that the Town Center locations get thinned out and/or the airport.

[fsujax]

Well, its official Downtown is losing the Starbuks at 11E.....another step backward for a struggling Downtown.

http://www.jacksonville.com/tu-online/stories/071808/bus_305670782.shtml

[copperfiend]

Sad that the 11E location is closing. Funny how Starbucks is closing their location inside the OP Mall and the location outside the OP Mall as well.

[Eazy E]

G-d it.  I mean, I thought it was lunacy that they would open a store when the Landing one is three blocks away, but the 11E is SO much nicer and easier to get to than the Landing. Wonder why they close 11E vs Landing? Cheaper rent? Harder-to-back-out lease?

[Jason]

More than likely its a couple of white collars on the 50th floor with a big conference table and a map fingering out random locations... 

[copperfiend]

I wonder if anybody at City Hall cares?

[Charleston native]

Sounds like this closing is a bad decision. Surprisingly, only one Starbucks is getting the axe up here in SC...it's located in Spartanburg.

Actually, I just had an idea. Somebody needs to contact Dunkin Donuts, Starbucks' main competitor, and see if they would consider moving in. The franchise is undergoing a pretty substantial expansion, and it wants to create more stores with a cafe look and feel, much like Starbucks. This might be a perfect fit, and give DD an opportunity to take away from its competitor. Can any of you MetroJax guys look into this?

[fsujax]

A Dunkin Donuts wouldn't be a bad idea.  There used to be one Downtown at the corner of Forsyth and Julia (i believe) its been closed a several years now.

[Traveller]

Caribou Coffee is another option.  Looks like they're interested in expanding into Florida.  One downside may be the long-term health of the parent corporation.

http://caribou.simplicis.net/page/1/step2.jsp?dma=Florida&state=true

[Charleston native]

Caribou Coffee's parent company is indeed struggling, but DD should definitely consider this store, especially after what fsujax just posted. If DD had a store location in downtown before, they might want to consider putting their presence there again, albeit would be further from downtown.

[David]

11E- OUT.

The Landing - Safe.


http://www.jacksonville.com/tu-online/stories/071808/bus_305670782.shtml

Starbucks will close six First Coast stores as part of a previously announced nationwide purge aimed at weeding out unprofitable locations.

The company released on Thursday the list of 600 stores to be closed.

Official closing dates have not been set. The company announced this month it would begin the closings in July, continuing through the first half of the next fiscal year.

The stores being closed:

- Downtown Jacksonville at 11 E. Forsyth St.

- 8060 Phillips Highway near Baymeadows in the B.J.s Wholesale Club and Lowe's shopping center.

- County Road 210 and Nature Walk in the Johns Creek shopping center.

- 1910 Wells Road inside the Orange Park Mall.

- 1907 Wells Road across from the mall near Target.

- 410 Blanding Blvd. near Kingsley in the Pine Tree Plaza shopping center.