Starbucks closing stores: American coffee retailer Starbucks (NASDAQ:SBUX) has announced that it will be closing nearly 150 US stores in fiscal 2019.
Starbucks Closing Stores
The move is one of several strategies that the company has created to increase the rate of growth and create long-term value for shareholders.
On average, Starbucks closes almost 50 of its stores per year.
According to the company’s President and CEO, Kevin Johnson, Starbucks also needs to “move faster to address the more rapidly changing preferences and needs of [its] customers.”
As well as addressing this challenge, Starbucks plans to expand its international reach in markets with its recent transaction with Nestlé (OTC:NSRGY). The company hopes that the arrangement will help to create 5 million additional points of presence in 189 countries.
Starbucks hopes that these strategies will help to accelerate “product innovation around core beverages while leveraging the growing tea and refreshment category, as well as consumer behavior trends towards health and wellness.”
Johnson also added that the company has already taken actions to streamline its operations, stating:
“Over the past year we have taken several actions to streamline the company, positioning us to increase our innovation agility as an organization and enhance focus on our core value drivers which serve as the foundation to re-accelerate growth and create long-term shareholder value.”
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Shares of Starbucks have declined nearly 10% since the strategies were announced on Tuesday. As of 1:20 pm EDT on Wednesday, shares of the company were hovering near a value of USD $51.91 and had been able to reach a high of $55.01 and a low of $51.84.
In comparison to Wednesday’s values, the company closed at a share value of $57.43 on Tuesday.
Are you surprised that Starbucks has decided to close so many of its stores? Will these new strategies benefit Starbucks?
Featured Image: DepositPhotos/lucianmilasan
