Business

Starbucks is going to close about 600 stores in U.S
by Petra Kamenicka

Starbucks is a well-known chain of coffee shops, based in Seattle. In previous years, Starbucks experienced an extraordinary expansion. A huge number of new branches have been opened in recent years. But now, according to latest announcements released on Tuesday, Starbucks seems to be in a period of recession. The aim of closure plan affects about 600 underperforming stores. Less than 200 new stores are planned to be opened in 2009. Surprising fact is, that previous closure plan intended to close only 100 stores. Additional 500 stores had been placed on internal watch list, they had been watched and compared and after evaluation of achieved results, the executive of company found out, that they were not profitable and they had no expectations of future profitability. So the decision of closure was made as an result. Nowadays, company must struggle with two big problems. The first one is slowdown of American economy, which has impact on almost each branch of American economy, Starbucks is not an exception. And the second obstacle is too rapid expansion of Starbucks stores in previous years. As says the statement of this company, seventy percent of stores that are going to be closed have been opened since 2006. A big impact on workforce is awaited too. About 12 000 workers will be affected by this closure. This number of workforce represents about seven percent of global workforce of this company. Both full-time and part-time working staff will be reduced. But the company says, it will try to place all affected people into remaining chain of Starbucks. The company firstly avoided acknowledging, that saturation of market was a problem, that caused bad financial results. They blamed the general situation in American economy. But in their announcement form Tuesday, they acknowledged the real reason of bad economical performance of the company. This closure will also bring back revenues to remaining stores. The chain of Starbucks consists of more than 16 000 stores all over the world. Company operates more than 7200 stores in U.S. and more than 1800 stores abroad. Remaining about 7100 stores are run by partners, that have a contract with Starbucks.

related story: http://www.hoovers.com/free/co/news/detail.xhtml?ID=15745&ArticleID=200807020400KRTRIB__BUSNEWS__9bf800000079f914_MB&source_type%5B%5D=

by Petra Kamenicka for PocketNews (http://pocketnews.tv)

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