by Brian Niccol, CEO of Starbucks, said on Thursday that the company is planning to close underperforming locations, including those where the coffee chain “is unable to create the physical environment that our customers and partners expect”, and 900 jobs will reduce.
The revision costs $ 1 billion, according to a Thursday statutory submission. Most costs are related to the closures of the store, such as $ 450 million in costs for early breaking of lease contracts. About $ 150 million covers costs for lowering the 900 employees, who, according to Niccol, are “not -Retail” employees.
Niccol unveiled the plan in a letter to employees, but did not indicate how many locations would be closed. He noted that after adding a few new locations in the past year, the general number of stores in North America of the company will fall by around 1% in the tax year 2025.
The company will end its current tax year with around 18,300 locations, he added. In the tax year of 2024, the company had 18,424 coffee shops.
The revision comes as part of Niccol’s “Back to Starbucks” Plan, a strategy designed to breathe new life into his coffee shops and convince consumers to return to the stores. Although Starbuck’s remains profitable, the turnover is delayed in the midst of increased competition from rivals such as Dunkin ‘.
“[W]E identified coffee houses where we are unable to create the physical environment that our customers and partners expect, or where we see no way to financial performance, and these locations will be closed, “Niccol wrote in the letter.
“Every year we open and close coffee houses for various reasons, from financial performance to leasing leasing. This is a more important action that we understand will influence partners and customers,” he added.
Which Starbucks -stores close?
Starbucks has not announced the locations that will close, although the app will be updated on Sunday to display stores that remain open, according to the company.
Under the closure of the locations, the Capitol Hill Roastery in Seattle, the company said.
Starbucks will continue to operate his coffee roasting, which are larger, luxury locations, in Chicago, Milan, New York, Shanghai and Tokyo, the company said.
According to a Thursday investigation memorandum from TD Cowen analyst Andrew Charles, around 500 North -American locations will be closed in the current quarter.
It was not immediately clear how much of the affected locations were united. Employees of 650 business ownership in US Starbucks stores have voted for trade unions since 2021, but they still have to reach a contract agreement with the company.
has contributed to this report.
