The tea party is over: Starbucks to close all Teavana locations

Jul 29, 2017, 00:31
The tea party is over: Starbucks to close all Teavana locations

Starbucks will close all its Teavana stores over the next year.

Starbucks is closing all of its 379 struggling Teavana stores, which means St. Clair Square mall in Fairview Heights will say goodbye to another retailer. About 3,300 employees will be impacted by the closings, but will be able to apply for jobs with Starbucks, which plans to hire 240,000 workers worldwide over the next five years.

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This is becoming a trend with Starbucks, which acquired the bakery La Boulange and began putting its baked goods in stores, later closing all of the chain's standalone stores.

The coffee giant has finally realized what many already knew: Americans don't like tea all that much. But US mall culture is fading, partially because more people are foregoing trips to big retail hubs for the convenience of online shopping. However, most Teavana locations are inside malls, which have seen a notable decline in revenue, occupancy and traffic over the last several years. Last quarter, Starbucks said the Teavana mall stores were dragging down sales, and the company was looking to "take clear action to improve the performance of our Teavana mall store portfolio". Overall, our tea business has grown 40% since we launched Teavana in the USA five years ago, and it is up over 60% since launching in China and Japan roughly one year ago.

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In its Asia unit, Starbucks' sales rose just 1 percent at established locations during the three-month period. The company is committed to operating 5,000 Starbucks stores in Mainland China by 2021, cementing Starbucks' future as a mainly coffee-based business. "We expect to sell over $1.6 billion of Teavana-branded handcrafted beverages through Starbucks stores around the world this year".

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