MIAMI (CBSMiami) — Starbucks is closing down hundreds of Teavana stores by the end of next year, the company announced Thursday.
That includes nearly 10 stores in South Florida like the stores in Dolphin Mall, The Falls, Merrick Park, Sawgrass Mills, Coral Square, Westfield Broward, The Mall at Wellington Green, Town Center at Boca Raton and The Gardens Mall.
The move is an end to a diversification strategy that started with mostly promise but yielded little – and mostly moved to Starbucks incorporating new brands into its existing locations, according to Forbes.
Starbucks financial reports, released Thursday, explained their decision, saying in part:
“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. As a result, Starbucks will close all 379 Teavana stores over the coming year, with the majority closing by Spring 2018.”
Starbucks bought Teavana for $620 million in 2012. At that time, Starbucks wanted to grow the tea store in malls but also tested out free-standing tea bars.
Now, Teavana is a staple of Starbucks within their own cafes.
The once profitable 379 free-standing tea bars will all be closing. Starbucks had warned of underperformance within the last quarter but the closing of the chain may suggest underlying problems that could not be easily fixed.
The cost of closing the stores may carry quite a price tag since many of the tea bars have lease obligations.
As for Teavana employees, the company says about 3,300 partners will be impacted by the closures but will get a chance to apply for positions at Starbucks stores since they plan to create 240,000 new jobs globally and about 68,000 in the U.S. within the next five years.