Starbucks to close 600 stores in US
Pastor Dale Morgan
Starbucks to close 600 stores in US*
* Associated Press
* guardian.co.uk,
* Tuesday July 1, 2008
Starbucks Corporation said today it will close 600 company-operated US
stores in the next year, up dramatically from its previous plan for 100
closures, a sign the coffee shop operator is still feeling the pain from
the faltering US economy.
Starbucks said in a statement that 70% of the stores to be closed were
opened after the start of 2006. The locations set to close include ones
that "were not profitable and not projected to provide acceptable
returns in the foreseeable future", it said.
About 12,000 workers will be affected by the closings, which are
expected to take place over the next year, according to Valerie O'Neill,
a spokeswoman for the company.
O'Neill said most of the employees will be moved to nearby stores, but
she did not know exactly how many jobs will be lost.
The company predicted related charges will add up to $328m to $348m, but
said that after income tax benefits and other changes, it expects to pay
about $100 million.
Starbucks also cut the number of company-operated stores it will open in
fiscal 2009 in half, to fewer than 200. The company did not adjust its
plan to open fewer than 400 stores in 2010 and 2011.
In May, Starbucks said its second-quarter profit sank 28% has US
consumers cut back on visits in light of rising food and gas prices.
As of the end in March, there were 16,226 Starbucks stores around the
world, including 7,257 company-operated stores in the US.