United Press International Writer
SEATTLE (UPI) — Starbucks announced it will close all 379 of its Teavana locations after the tea shop showed poor sales and little hope of improving.
“Following a strategic review of the Teavana store business, the company concluded that despite efforts to reverse the trend through creative merchandising and new store designs, the underperformance was likely to continue,” Starbucks said in a press release disclosing its earnings.
The closures are expected to affect more than 3,000 employees over the next few months. However, Starbucks also announced it plans to hire more than 60,000 more employees over the next five years at its coffee shop locations.
Starbucks first purchased Teavana, a mall-based business, in 2012 for $620 million. But the investment proved to come at a bad time for mall companies, such as JC Penney and Game Stop, which have both announced large-scale closings, reported CNN.
The prognosis for malls in general doesn’t look very good, with 20 to 25 percent expected to close over the next five years.
Although Teavana didn’t prove to be profitable enough for Starbucks, overall sales have been strong. The company said its third quarter sales increased by 5 percent in the U.S., 7 percent in China and 4 percent globally.
Starbucks also opened 575 new stores around the world, with a total count of 26,736 across 75 countries.
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