"Starbucks said Thursday it's closing hundreds of stores in the U.S., Canada and Europe and laying off 900 nonretail employees as it focuses more of its resources on a turnaround. The Seattle coffee giant said store closures would start immediately. Starbucks said affected baristas will be offered severance packages and transfers to other locations where possible. The company wouldn't give a number of stores that are closing, but the bulk of the closures appear to be in the U.S. and Canada. Starbucks said it expects to have 18,300 North American locations when its fiscal year ends on Sunday."
"In a letter sent to employees Thursday, Niccol said a review of the company's stores identified locations where the company doesn't see a path to financial stability or isn't able to create the physical environment customers expect. Those stores are being closed. Each year, we open and close coffeehouses for a variety of reasons, from financial performance to lease expirations, Niccol wrote. This is a more significant action that we understand will impact partners and customers."
Starbucks will close hundreds of stores in the U.S., Canada and Europe and eliminate about 900 nonretail jobs to concentrate resources on a turnaround. Store closures begin immediately; affected baristas will be offered severance and transfers where possible. North American locations are expected to total 18,300 at fiscal year end, down from 18,734 as of June 29. A TD Cowen analyst estimated roughly 500 North American closures in the quarter. The company identified stores lacking a path to financial stability or the expected physical environment. Starbucks plans a $1 billion restructuring, including $150 million for separation benefits and $850 million for store-related charges.
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