Starbucks Corporation (NASDAQ:SBUX) is planning to close all of its Teavana retail locations.
The majority of Teavana retail stores are located inside of malls. Starbucks notes that many of these locations have been underperforming lately, which is why it is shutting them down. The decision was made after the company made a strategic review of the business.
Starbucks says that it made attempts to avoid the Teavana closing decision, but that its efforts aren’t likely to boost the brand. This included redesigning some of the stores and offering creative merchandise.
Due to Starbucks’ decision, it will be closing all 379 Teavana locations over the next coming year. The coffee chain says that it plans to have the majority of the locations shut down by Spring 2018. Employees of these locations will be given the opportunity to apply at the company’s coffee stores as it looks to hire 68,000 in the U.S. over the next few years.
Teavana locations underperforming won’t come as much of a surprise to anyone keeping track of the retail sector. Mall traffic has been declining lately and it has resulted in some stores leaving malls completely. Others, such as American Eagle Outfitters (NYSE:AEO), have seen the drop in traffic hurt earnings recently.
Starbucks made the announcement concerning the Teavana closings in its earnings report for its fiscal third quarter of 2017. The company also reported earnings per share of 55 cents on revenue of $5.66 billion. Wall Street was looking for earnings per share of 55 cents on revenue of $5.75 billion for the quarter.
SBUX stock was down 8% as of Friday morning.
As of this writing, William White did not hold a position in any of the aforementioned securities.
