Starbucks to close all Teavana stores

Starbucks has released its financial results for the third quarter of the 2017 financial year, along with the news that it plans to end its experiment with its standalone tea retail outlets, Teavana. Following a strategic review of the Teavana store business, the company concluded that despite efforts to improve it through creative merchandising and new store designs, its underperformance was likely to continue.  As a result, Starbucks will close all 379 Teavana stores over the coming year, with the majority closing by Spring 2018. The company says that the approximately 3,300 employees impacted by these closures will receive opportunities to apply for positions at Starbucks stores, as the company remains on track to create 240,000 new jobs globally and 68,000 in the US over the next five years. Starbucks also announced plans to consolidate its business operations across Mainland China by acquiring the 50 per cent of Shanghai Starbucks Coffee Corporation that it didn’t already own from joint-venture (JV) partners Uni-President Enterprises Corporation (“UPEC”) and President Chain Store Corporation (“PCSC”). The company said its decision was driven by the fact that customers in China have embraced the Starbucks brand and customer experience since it opened its first store in the market 18 years ago. “Starbucks stores in China are among the most innovative, coffee-forward Starbucks stores in the world, consistently generating strong revenue and same-store sales growth, and world-leading returns on investment,” the company said in a statement. Mainland China is Starbucks’ largest and fastest growing international market with 2,800 stores in 130 cities, employing nearly 40,000 people. Through this acquisition, the largest single acquisition in the company's history, Starbucks will assume 100 per cent ownership of approximately 1,300 Starbucks stores in 25 cities in the Shanghai, Jiangsu and Zhejiang Provinces. Concurrently with the purchase of the East China JV, UPEC and PCSC will acquire Starbucks’ 50 per cent interest in President Starbucks Coffee Taiwan Limited, and assume 100 per cent ownership of Starbucks operations in Taiwan. Founded in 1997, the Taiwan JV currently operates approximately 410 Starbucks stores in Taiwan. Meanwhile, the rest of the company posted strong financial results for the quarter. “Starbucks leveraged food and beverage innovation, an elevated in-store experience and personalised digital connections to our customers to deliver another quarter of record financial and operating performance, despite the softness impacting our principal sectors overall,” said Starbucks’ President and CEO, Kevin Johnson. “Starbucks once again reported record operating and financial performance in Q3 – reflecting the back-half acceleration we've been anticipating,” said Scott Maw, Starbucks’ CFO. “Nonetheless, despite posting record performance in Q3 and further extending our lead compared to the industry overall, the combination of trends in the quarter and ongoing macro pressures impacting the retail and restaurant sectors has us a bit more cautious going into Q4.”