Starbucks to Close Teavana Stores, Lay Off 3,300 Employees
World-famous operator of coffeehouses, Starbucks Corporation, has announced that the company is closing all of its “Teavana” stores and, in the process, laying off more than 3,000 workers. The Seattle-based coffee company has said that its 379 Teavana stores will be shut down by spring 2018, which means that 3,300 employees will be cut loose.
Teavana is a chain of tea houses operated by Starbucks. The company acquired the tea retailer in 2012, but lackluster sales have forced the coffee company to permanently shutter the Teavana operations. Starbucks will continue to offer the Teavana-branded products at its Starbucks stores, however.
According to Starbucks, the company repeatedly invested in the Teavana brand “through creative merchandising and new store designs.” However, the brand failed to impress in terms of sales. According to Starbucks management, the Teavana brand has been underperforming, and its underperformance was likely to continue.
With these store closures, Starbucks joins the growing list of retailers that are wrapping up their operations at American malls. Most of the Teavana stores are in malls, and American malls are facing a steep decline in foot traffic. That’s because the tastes of the average American consumer are shifting away from brick-and-morter shopping.
Part of this decline is owed to the fact that major anchor stores are exiting American malls. Big department stores like Sears Holdings Corp, J C Penney Company Inc, and Macy’s Inc have announced hundreds of store closures at underperforming mall locations. As a consequence, these malls are seeing an overall drop in shoppers.
The announcement of the Teavana store closures was made in the latest Starbucks quarterly call, when the company delivered a worse-than-expected guidance for its future sales growth. The publicly-traded company saw a sharp drop in its stock price following its poor earnings call.
Despite the store closures within the United States, Starbucks has shared its plans to further expand into China, where it sees a lucrative market.
“Starbucks to close down all Teavana locations, impacting 3,300 jobs,” CNN Money, July 28, 2017.
“Starbucks shares fall 4 percent after US sales fail to gain traction,” CNBC, April 27, 2017.