Starbucks’ woes continue with further store closures

05 February, 2009
Starbucks has announced plans to close a further 300 underperforming stores - 200 in the US and 100 internationally - however details have yet to be released on whether UK stores will be affected.
Starbucks is the fourth biggest bakery retailer in the UK behind Greggs, Subway and Costa, according to the British Baker Top 50 league table of bakery retailers, based on store numbers in 2008; it opened 99 stores in the UK last year.The proposed store closures are part of the company’s “cost saving initiatives”, which could see up to 6,000 employees out of a job worldwide. A spokesperson for Starbucks said: “We do not at this time have specific details about numbers of partners or stores that may be impacted by these announcements in the UK.”In 2008, Starbucks announced it was to close 600 of its company-operated US stores last year and 61 in Australia, costing the firm $75.5m in pre-tax restructuring costs. It has also reduced its new company-operated store openings target from 200 to 140 in the US, and from 270 to 170 internationally, in fiscal 2009.In the coffee chain’s financial statement for the quarter ended 28 December 2008, it reported a fall in consolidated operating income to $117.7m, compared to $333.1m for the same year period last year.Consolidated net revenue of 6% on the same period last year fell to £2.6bn, which it put down to “a decline in store sales of 9%”. Revenue in the US dropped 6% and international revenue was down 8%. “Starbucks has been looking at all parts of the business to manage our cost structure and align the organisation in the most efficient way possible for the long term. Our priority during this time is to prepare for the continued uncertainty in the economy and ensure we have a strong foundation to support our long-term goals,” added the Starbucks spokesperson.



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