Seattle-based coffee chain Starbucks recently said it would be closing dozens of stores there for good. This decision is in line with even broader restructuring efforts, though. These closures will affect 34 stores in the city’s five boroughs. This move marks close to a 1% reduction in total Starbucks stores in North America.
At the same time, CEO Brian Niccol announced the company’s $1 billion restructuring plan. As part of this localized campaign, 900 employees will be losing their jobs across the continent. This well-calibrated play is designed to improve the company’s operational execution and ultimately fix its struggles with profitability.
Many notable storefronts are announcing their permanent shutdowns. These spaces include 372 Greenwich St, 444 Broadway, 405 Broadway, 230 Varick St., 393 Third Ave., 625 Atlantic Ave, 140 West St, and 750 Sixth Ave., as well as 309 Gold St. in Brooklyn.
During the review, we identified coffeehouses where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance, and these locations will be closed, stated Brian Niccol.
The withdrawal from these stores is part of a broader recalibration of Starbucks’ footprint in cities. It indicates a historic push to make sure the stores we have left are both what customers expect and what’s financially possible.
Over the past few months, Starbucks has found itself on the defensive over its business practices and treatment of workers. The national restructuring plan addresses these challenges head-on. Its purpose is to make operations more efficient and continue to provide good service at the most viable locations.
With closures on the horizon, Niccol doubled down on the long-term evolution of Starbucks, saying they’re in an improved cycle.
“Good progress, there is much more to do to build a better, stronger, and more resilient Starbucks.” – CEO Brian Niccol
Weeding out safety The implications of these closures reach further than the direct effect on workers and constituents. They have the power to influence their company’s market entry strategy in urban markets. On the other hand, here, competition is intense, and the tastes of consumers can shift overnight.
