SAN FRANCISCO (Thomson Financial) - Starbucks Corp. late Tuesday said it
will close around 600 underperforming stores in the U.S., including some 100
stores already slated for closure under the company's restructuring plan
announced earlier this year.
Some 70% of the affected stores first opened in January 2006, the
Seattle-based coffee company said.
In addition, Starbucks now expects to open fewer than 200 new U.S.
company-operated stores in fiscal 2009.
Most of the closures will take place over the rest of this year and through
the first half of fiscal 2009, but the timing is ultimately dependent on
finalizing third-party agreements, the company said.
While full-time and part-time positions will be eliminated, Starbucks
expects to place "many" of the affected employees in nearby stores.
The retailer now sees total pretax charges from the store closures of $328
million to $348 million.
Severance-related costs will amount to around $8 million, to be recorded
over the same timeframe as the store closures. The company also expects
third-quarter pretax asset write-offs of $200 million and $120 to $140 million
for lease termination costs and future lease obligations.
The company sees a net cash outflow of around $100 million net of related
income tax benefits once all the scheduled closures are completed.
The stock closed the regular session down 12 cents at $15.62.
Brigid Gaffikin
bg/gm
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