Starbucks is closing 600 stores, or 8.5% of its U.S. company-operated portfolio, affecting about 12,000 employees. Although it is not releasing a list of which cafes are targeted, the company says
that many of them are near another cafe, so customers will not be left without a Starbucks close by. Some of the stores were so close that they were cannibalizing each other, says CFO Pete Bocian.
About 70% of the stores designated for closure opened after October 2005, representing about one in five of the new stores opened during that period. Collectively, they were not
profitable.
The closures are part of Starbucks' larger transformation strategy, which is threefold: Improve the state of U.S. business, make customers happy and focus on long-term
sustainability. Starbucks reinstated Howard Schultz as chief executive in January, and he has since been shaking things up by adding new product lines, slowing U.S. store growth and ramping up
international expansion.
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