Starbucks to cut up to 12,000 jobs, close 600 stores
 

I have to wonder if the stores are closing due to lack of demand. I mean how many times have you gone into a Starbucks and its been empty. I think the real reason more likely is that people see ten people in line and refuse to therefore wait 30 minutes to an hour for $5.00 coffee. I know I HATE that about Starbucks :shrug:


Starbucks to cut up to 12,000 jobs, close 600 stores

By Lisa Baertlein

Starbucks Corp (SBUX.O) said on Tuesday it plans to close 600 underperforming stores and eliminate as many as 12,000 full- and part-time positions, lifting shares nearly 6 percent.

The company, which has been grappling with the slowing U.S. economy and consumer spending at the same time that major competitors like McDonald's Corp (MCD.N) have begun attacking its core business, now plans to close a total of 600 underperforming stores by the end of March 2009.

Howard Schultz, the coffee chain's founder and chief executive, retook the helm in January and quickly announced plans to shutter 100 underperforming outlets.

With U.S. sales growth slowing, he slashed plans for store openings and shifted the company's most ambitious expansion efforts to international markets.

"At this point, management has decided that 2008 is a wash and to throw in everything but the kitchen sink to get ready for growth in 2009 and beyond," said William Blair analyst Sharon Zackfia.

"It's another sign that management doesn't have their head in the sand," said Zackfia, who has an "outperform" rating on the stock.

Starbucks said the closures are spread across all major U.S. markets and that 70 percent of the targeted stores have been open since the beginning of fiscal 2006. The accompanying job losses would represent about 7 percent of the company's global work force.

Starbucks estimated that total pretax charges associated with the planned U.S. company-operated store closures, including costs associated with severance, would be in the range of $328 million to $348 million.

The Seattle-based company aggressively opened stores in areas such as California and Florida, which have been hardest hit by the U.S. housing downturn. Some investors, worried that the company had built too many outlets in the United States, pushed the company to increase the number of store closures.

"This is validating some of the critics who said they were opening stores too close to one another," said James Walsh, an analyst at Starbucks investor Coldstream Capital Management.

Starbucks also said it will open fewer than 200 new U.S. company-operated stores in fiscal 2009, down from 250 previously.

The stock rose to $16.53 in late electronic trading, up 5.8 percent from its close of $15.62 on Nasdaq.

(Additional reporting by Nichola Groom and Jennifer Martinez; editing by Jeffrey Benkoe, Leslie Gevirtz)

http://news.yahoo.com/s/nm/20080701/bs_nm/starbucks_dc

All I know is that there are numerous places in New York City where you can walk out of a Starbuck, go about a block and there's another Starbucks. There's even one area in the city where there is essentially a Starbucks across the street from a Starbucks, which was across the street from a Barnes and Noble that had a Starbucks in it. Ridiculous.

I know. But, my experience with those (esp. in NYC) is they are always full (at least five people in line). So, I wonder why they are not making any money. Again, I think it is because although there is a HUGE mark up in the coffee and other products, the service is pathetic and slow. Again, I see people in the drive through here in Atlanta that are still in line 30 minutes later when I get back from my run :eek:

Having said that, the $5.00 Green Tea is FAB as is the $7.00 large Frappucino :nod:

I've been in one...
 

StarSUCKS just one time, to sell my original Fleetwood Mac ticket for the July 1,2003 show (Damn it has been 5 years already???) and I couldnt wait to escape from there - I felt the sudden urge to hug a tree, wear a pair of Dockers while driving a mini-van listening to Michael Bolton...Pure hell!!!

StarSUCKS did as well as CRAPPYCreme NO-Nuts did in OKC, as Empty as the thoughts of those running the family of MTV (aka EmptyVee) Music Channels - VERY Empty!!! Point to your head and spell the abbreviation of "Mountain"....There ya go!!!!

Brian "Get me the hell outta there" j.

It think it's just a preemptive strike because they know that things are going to get worse before they get better. Also they are guilty of over expansion. There are at least five of them in a two mile radius here. They're even in the grocery stores. Still I doubt they are losing money.

Starbucks is NOT losing money. They just over expanded into questionable locations...like suburban shopping centers. The senior management responsible for that is gone. Plus there are lots of competitors nearby like Coffee Bean and Peets, even 7-11. After the reduction Starbucks will still have around 7,000 locations.

Finally some good news. Close them all.

It's interesting, in the city, the only main competitors of Starbucks are Dunkin Donuts and now those are popping up EVERYWHERE. And we didn't have very many at all a few years ago.

I personally hate Starbucks actual coffee but I like their sweet drinks. I remember reading somewhere that they purposefully brew darker roasts because they are less appealing and they hope that customers will choose to order the more expensive drinks (lattes, fraps, etc.) instead of just getting a cup of coffee.

Interesting. Coming from a heavy coffee background, (former barista and coffee house manager here! :wavey:) I will say that I am not fond of Starbucks brewed coffee. But their other products are pretty decent.

I've never really understood the hatred for Starbucks. It's my understanding that they are a great company to work for (part time employees, as well as same sex employees, are given full medical benefits) and the owner/CEO is also a philanthropist. Starbucks may not be your cup of tea (HA!) but I believe they paved the way for some truly excellent independent (and franchised) coffee houses.

I think I've been to a Starbucks maybe twice in my life and bought just a regular coffe.... Can't wrap my head around spending $5 or more for all these fancy coffee's and drinks :eek: To me it's a waste!

Sucks to be a resident in Seattle - StarBucks losing jobs and now they have lost the NBA SuperSonics.

Instead of putting so many in the huge cities, why not trying to expand more out here in rural areas.
I mean, there are two DDs in a 5 minute driving range from my house, and two more not too far from them.

I would kill for a Starbucks out here!! [There is a nice building for sale right across the street from my house on a nice major road....I would LOVE if one went in there!!!]. But the thing is, so many people hate the prices. We think DD is expensive, and I'm sure Starbucks would be outrageous.

It is over-priced, but the cold mochachino thing is sooo good.
It's just a shame so many people will be loosing jobs...

Wow. I didn't know that. I am not a fru-fru, fluff coffee drinker. I like coffee and I like it black. Starbucks coffee is really bad, it always tastes burned.

Give me Peet's, give me Ma & Pa coffee shop, give me a bag to home brew. Anything but Star****s.

After all thease years i have not tried Starbucks coffee, I better check the one across town., Anyway The small town I live in, has about 7 Dunkin' Donuts here. including the ones in B.J's and Stop and Shop anyway Dunkin' Donuts are alway packed with customers to the gills.DD are probably stealing customers from Starbucks all these years for cheaper coffee.DD is like Home Depot to the Ma Pa Hardware store.

Dunks has also been expanding outside of the NE so they may be stealing business there unexpecedly. I am heading out to Dunks in a moment. :thumbsup: I prefer their coffee over the darker roast and more expensive Starbucks coffee.