While coffee giant Starbucks shows no signs of slowing down, the company recently announced its plans to close down all of its Teavana storefronts.
Teavana, a loose-leaf tea company which was established by a husband and wife team back in 1997, was acquired by Starbucks in late 2012 for an estimated value of $620 million.
Unlike its parent company, Teavana locations are located primarily in malls and shopping centers, and instead focus on the sale of loose-leaf tea along with other tea products, while made-to-order beverages only making up a portion of the company’s business.
Despite being acquired less than five years ago, recent shifts in the economy have forced Starbucks to shutter all 379 Teavana stores, a process which it aims to complete by Spring 2018.
With the rise of online retail giants such as Amazon, and changes in fashion trends, malls are no longer the bustling shopping destinations that they once used to be, with experts estimating that between 20 percent and 25 perccent of American malls will close their doors within the next five years.
To some, the closing of all Teavana shops comes as no surprise. In the first half of this year alone, more than 5,300 retail storefronts have closed, with companies like Sears, GameStop, and JCPenney cutting back on their number of locations.
— Fortune (@FortuneMagazine) July 27, 2017
Despite the shuttering of its Teavana stores, Starbucks has continued to grow when it comes to their more traditional coffee shops. Despite a lack of growth in customer visits, the company saw sales rise 5 percent in established locations, and most recently, made its biggest deal ever in the Chinese market. The deal, which cost over $1.3 billion, gave Starbucks complete ownership of all of its restaurants in East China.
It’s worth noting that the planned closing of Teavana is not the first Starbucks acquisition to go south. Just two years ago, the company closed all 23 of its La Boulange bakery cafes, along with the two manufacturing plants which serviced these locations.
When life gives you lemons, make lemonade iced tea. Obvs.???? pic.twitter.com/f3WJQA83Po
— TEAVANA (@TEAVANA) July 27, 2017
While over 3,300 Teavana store employees will be affected by the company’s closing, Starbucks has pledged to make amends, offering the chance for current Teavana employees to apply for positions at Starbucks locations.
[Featured image by Stephen Brashear/Getty Images]