STARBUCKS IN BIG BIG TROUBLE

[DRTYFN]

The anti-SUV enviro-nazis enjoy seeing American auto makers in trouble. Well, I love this.

Starbucks closing 600 stores in the US
SEATTLE -- Starbucks Corp. said Tuesday it will close 600 company-operated stores in the next year, up dramatically from its previous plan for 100 closures, a sign the coffee shop operator continues to struggle with the faltering U.S. economy and its own rapid expansion.

Seventy percent of the stores slated for closure had opened after the start of 2006, the company said in a statement.

To put it another way, Starbucks is closing 19 percent of all U.S. company-operated stores that opened in the last two years, Chief Financial Officer Pete Bocian said during a conference call.

About 12,000 workers, or 7 percent of Starbucks' global work force, will be affected by the closings, which are expected to take place between late July and the middle of 2009, spokeswoman Valerie O'Neil said.

O'Neil said most employees will be moved to nearby stores, but she did not know exactly how many jobs will be lost. Starbucks estimated $8 million in severance costs.

In total, the company forecast up to $348 million in charges related to the closures, $200 million to be booked in the fiscal third quarter ended June 30. Starbucks reports third-quarter results at the end of July.

The 500 additional stores set to be closed had been on an internal watch list for some time. They were not profitable, not expected to be profitable in the foreseeable future, and the "vast majority" had been opened near an existing company-operated Starbucks, Bocian said.

Some analysts had wondered whether Starbucks' explosive growth in the U.S. would come back to haunt it as the market became saturated.

But before Tuesday, the company avoided acknowledging that saturation was an issue, and pinned weak financial results and adjustments to new store openings on the economy.

During the call, Bocian said that between 25 and 30 percent of a Starbucks shop's revenue is cannibalized when a new store opens nearby, and that the closures should help return some of that revenue to the remaining stores.

Bocian said there aren't a material number of stores left on the watch list, but that the company will hold remaining stores to the same standards.

Starbucks still plans to open new stores in fiscal 2009, but on Tuesday it cut that number in half to fewer than 200. The company did not adjust its plan to open fewer than 400 stores in 2010 and 2011.

"We believe we still have opportunities to open new locations with strong returns on capital," Bocian said.

During the conference call, the CFO echoed concerns about the economy expressed by Chief Executive Howard Schultz in May, when the company attributed a 28 percent drop in profit to less traffic from U.S. consumers who were feeling the pinch of higher food and gas prices.

At the end of March, there were 16,226 Starbucks stores around the world. The company operates 7,257 of those stores in the U.S. and 1,867 abroad; the remaining 7,102 locations are run by partners who license the Starbucks brand.

Shares of Seattle-based Starbucks jumped 78 cents, or 5 percent, to $16.40 in after-hours trading after losing 12 cents to close at $15.62.

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http://seattlepi.nwsource.com/busine..._closings.html

[RubHer Yellow Ducky]

Originally Posted by DRTYFN

The anti-SUV enviro-nazis enjoy seeing American auto makers in trouble. Well, I love this.


http://seattlepi.nwsource.com/busine..._closings.html

They better not close MY CLOSEST 3 !!!!!!!

[H3slate]

There are 3 within walking distance to me, and a 4th with a drive thru is just opening up.

[HummerHippy]

like their coffee. I think they're a good employer. Whats not to like?
And if they close, there's always Dunkin Donuts.

[Big Dad]

[quote=DRTYFN]The anti-SUV enviro-nazis enjoy seeing American auto makers in trouble. Well, I love this.


This was bound to happen.

All the tightwad Prius owners have to spend their $5 dollar daily allowance on a gallon of gas instead of the Venti double shot iced soy mocha whip topped with colored sprinkles and a chocolate stick!

Bet those wacko's are wishing they'd stayed at home instead of protesting ANWR now!

[frenzy1]

I love starbucks ! Wish we had one in Belgium !

[Karsun]

Hey, I love Starbucks and go there quite often. We have four now.

[Bully13]

I'm sure they won't close mine. They are always busy.

[06-H3]

They could close all 600 in Boston and no one would even notice. Last time I was out there I think they averaged 6 per block in the city. You know it's over-kill when you see two of them directly across the street from each other in the city.

[brad_p]

I hate starbucks, yes the coffee is good but i hate the people that think they are awsome because they think that drinking starbucks makes them look cool. Bunch of stuck up pricks is what most of the people who hang out at starbucks around here are. Coffee Beanery has better coffee anyways.

[mdoyle]

This news struck me, since a) every Starbucks I've ever been to (and it's been a lot across the country) has been busy and b) their margin on cost of goods sold has to be through the roof.

How in the hell do you not turn a profit when you're charging $4 for a damn cup of coffee and you've got lines all morning waiting to buy?

If that business model doesn't work, then our economy is screwed more than we realize.

Thanks "Ethanol Lobby", you single handedly managed to F up the US Economy *and* starve the rest of the World.