Starbucks to shutter all Teavana stores as sales disappoint

Ashley Carr
July 29, 2017

The Starbucks-owned Teavana brand is closing down all its storefronts, in what is the latest blow to struggling American malls.

Meanwhile, Starbucks confirmed it will close 379 "underperforming" Teavana tea shops, which will impact more than 3,000 workers. "We conducted a strategic review of the Teavana mall-based store business and concluded that despite our efforts to reverse the trend through creative merchandising and new store designs, the underperformance was likely to continue".

The Seattle-based coffee chain acquired Teavana in 2012. Mr. Johnson spoke to the many pluses of the tea business during the July 27 conference call.

In its Asia unit, Starbucks' sales rose just 1 percent at established locations during the three-month period.

The Mall at University Town Center is losing its Teavana store, bringing total causalities from mass corporate closures at the shopping center to four for the year.

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The deal in China will give Starbucks ownership of about 1,300 stores in Shanghai, Jiangsu and Zhejiang.

Competition has intensified in the US restaurant industry, making it challenging for chains to get customers to visit their stores more often. Many of them will be shut down by next spring.

Starbucks plans to launch Teavana-branded packaged tea in grocery channels by the end of fiscal 2018.

Starbucks' shares were down 7.6 percent at $54.95 in early trading and the company was on course to shed about $7 billion in market value.

The coffee giant acquired the US tea chain in 2012 for $620 million, when then-CEO Howard Schultz cited the expanding tea market as an appealing place for growth. The majority of brick and mortar Teavana stores are located inside of these former consumer hotspots, so it's no wonder Starbucks Corporation has made a decision to do away with the flailing company.

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