Starbucks closing all Teavana stores
- Author: Wendy Palmer Jul 29, 2017,
Jul 29, 2017, 0:32
The Starbucks-owned tea company reported disappointing global sales growth on Thursday, and said it will close all 379 Teavana stores in the coming year. The company said numerous Teavana stores, which are mainly based in malls, "have been persistently underperforming".
Starbucks is planning to create another 240,000 jobs over the next five years as it targets the Chinese market, which is now the most lucrative for the Seattle-based firm. "Our Teavana mall stores have not been immune, with many reporting negative comps and operating losses for some time".
Most Teavana stores will close by spring 2018.
Starbucks had also opened a few standalone Teavana-branded tea bars, but ended the experiment by converting these businesses into Starbucks cafes or closing them.
Starbucks acquired the mall-based tea chain in 2012, in the hopes of doing for loose-leaf tea what the company had done for coffee.
Dunkin Donuts also reported that traffic to its established USA locations declined in recent reports, and McDonald's has increased competition with $1 sodas and $2 McCafe smoothies, frappes, and shakes, CBS News reported. Earlier on Thursday, the company also announced that it would be spending $1.3 billion to purchase the remaining 50% of its joint venture business in China, according to a Chicago Tribune report.
The news comes as Starbucks announced it was expanding in China, with plans on doubling its coffeeshops to 5,000 locations in the Chinese market by 2021. The company said its sales growth was lower than what analysts expected.
Starbucks shares fell $1.25 to $58.25 in extended trading.