Starbucks Corp. announced that it will close 600 "underperforming" stores in all major U.S. markets.
Approximately 70 percent of the stores being closed have opened since the beginning of fiscal 2006, Starbucks said in a statement.
The Seattle coffee giant did not disclose which stores would be closed. It operates more than 60 in the Pittsburgh area, including those that operate within Giant Eagle stores.
Starbucks also said that it will open fewer than 200 new stores in the United States in its fiscal 2009 year. Starbucks operates about 7,000 stores itself and licenses another 4,100 in the United States.
"We recognize that it is necessary to make decisions that will strengthen the U.S. store portfolio and enable us to enter into fiscal 2009 focused on enhancing operating efficiency, improving customer satisfaction and ensuring long-term value for our partners, customers and shareholders," CEO Howard Schultz said in a statement.
Starbucks (NASDAQ:SBUX) said pre-tax charges related to the closings will be about $200 million in asset write-offs that will be recognized in the third quarter of 2008. In the fourth quarter of 2008 and for the first half of fiscal 2009, the company said it expects up to $140 million in lease-related costs. Severance costs are expected to be about $8 million.
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Approximately 70 percent of the stores being closed have opened since the beginning of fiscal 2006, Starbucks said in a statement.
The Seattle coffee giant did not disclose which stores would be closed. It operates more than 60 in the Pittsburgh area, including those that operate within Giant Eagle stores.
Starbucks also said that it will open fewer than 200 new stores in the United States in its fiscal 2009 year. Starbucks operates about 7,000 stores itself and licenses another 4,100 in the United States.
"We recognize that it is necessary to make decisions that will strengthen the U.S. store portfolio and enable us to enter into fiscal 2009 focused on enhancing operating efficiency, improving customer satisfaction and ensuring long-term value for our partners, customers and shareholders," CEO Howard Schultz said in a statement.
Starbucks (NASDAQ:SBUX) said pre-tax charges related to the closings will be about $200 million in asset write-offs that will be recognized in the third quarter of 2008. In the fourth quarter of 2008 and for the first half of fiscal 2009, the company said it expects up to $140 million in lease-related costs. Severance costs are expected to be about $8 million.
http://news.moneycentral.msn.com/provider/providerartic...=20080702&id=8853644