Starbucks Closures in Texas

Whether you are a Starbucks patron or not, no doubt you've heard that the Seattle-based coffee chain either has closed or will be closing approximately 600 "under-performing" stores and cut about seven percent of its workforce. Starbucks wil be closing several stores in Texas, 9 of them in the Houston Area.

Fortuantely, none of The Woodlands Starbucks Locations were on the chopping block. Among the 44 states with closures, the largest group (with 88 closures) were in California; then Florida, with 59 and Texas with 57. Starbucks had approximately 11,000 locations in the U.S. The closings were completed during 2009.

SEATTLE; July 1, 2008 Increases Number of U.S. Company-Operated Starbucks Store Closures as Part of Transformation Strategy. Approximately 600 Underperforming Stores are expected to be closed as the Coffee Company takes Significant Step toward Improving Long-Term Profitable Growth. Starbucks Corporation (NASDAQ: SBUX) has announced the next step in its multi-faceted plan to transform the company, with a decision to close approximately 600 underperforming company-operated stores in the U.S. market. This decision is a result of a rigorous evaluation of the U.S. company-operated store portfolio and includes the 100 stores targeted for closure in the company's previously announced plans. In addition, Starbucks now expects to open fewer than 200 new U.S. company-operated stores in fiscal 2009.

Starbucks Announces More Coffee Shop Closures
6,000 Jobs to be Cut

Wednesday, 28 January 2009 - Starbucks Corp. has announced yet another round of coffee shop closures and barista layoffs. According to a Starbucks representative, profits dropped 69 percent in the fiscal first quarter and sales continue to slide.

In addition to the 600 U.S closures already planned, another 300 underperforming, global stores will be closed by the end of the fiscal year. Starbucks has already closed 384 of the initial 600 stores.

This additional group of closures is projected to result in the loss of approximately 6,000 in-store jobs, not including plans to lay off another 700 non-store employees.

According to Edward Jones analyst Jack Russo, the cuts are understandable given the sales decline in in recent quarters. The cuts and changes at Starbucks are expected to result in about $500 million in savings in fiscal 2009, according to a company rep. Russo further commented that 2009 will be a transition year for Starbucks, and the company will have to "claw their way back."

Wall Street expectations were that Starbucks would report dismal performance for the quarter ending Dec. 28, relating back to warning that slow sales the previous month would likely cause a miss agianst analysts' estimates. Heeding the company's warning, analysts lowered their average expectation from 22 cents per share to 17 cents per share. Even so, Starbucks fell short, with net income of $64.3 million, or 9 cents per share, down from $208.1 million, or 28 cents per share a year earlier.

Excluding charges from closing the 600 U.S. stores and 61 stores in Australia, the company said it earned 15 cents per share in its first quarter. Revenue dropped to $2.62 billion from $2.77 billion; projections held revenue at $2.70 billion. The company's U.S. same-store sales dropping 10 percent in the first quarter.

Starbucks also has reduced the number of new stores it plans to open in coming months, opening only 140 new stores in the U.S. in fiscal 2009, down from the previous target of 200 new coffee shops. Additionally, the projected new 270 overseas stores has been reduced to 170.