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Teavana closing at Lehigh Valley Mall, all 378 other locations

29 July, 2017, 00:30 | Author: Paula Vaughn
  • Starbucks

"As a result, we will be closing all 379 of our Teavana mall stores over the coming year".

Starbucks announced Thursday that it will be shuttering all locations of Teavana, a tea-centric shop that now boasts 379 locations throughout the country. Starbucks says that, despite its efforts to drive traffic through creative merchandising and new store designs, it's not optimistic that the troubling trend will reverse itself.

The coffee company acquired the US mall-based chain in 2012, the Associated Press reported. Mr. Johnson spoke to the many pluses of the tea business during the July 27 conference call.

The coffee giant acquired the USA tea chain in 2012 for $620 million, when then-CEO Howard Schultz cited the expanding tea market as an appealing place for growth.

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The company also announced that would close all 379 of its Teavana stores, which it acquired in 2012, according to a report in Reuters. But US mall culture is fading, partially because more people are foregoing trips to big retail hubs for the convenience of online shopping. The Seattle-based coffee brand is on track to create 240,000 new jobs globally and 68,000 in the nation over the next five years. The Canadian company has come out strong since its IPO two years ago, with a total of 232 stores in the US and Canada.

Starbucks also reported global sales growth of 4 percent at established locations, fueled by higher average spending per visit.

Johnson dismissed the idea that such promotions affect Starbucks, saying that the "value players" are competing in a different segment. By 2015, it chose to shutter all 23 La Boulange retail locations, along with its two manufacturing facilities that served those bakeries. Instead, Teavana products began to show up on the standard Starbucks menu, including an Oprah-endorsed chai and a piña colada-themed tea drink. Starbucks stock fell 5.6 percent on the announcement.

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