Starbucks to close 600 stores in US

Retail

Starbucks Corp. has announced its plan to close 600 underperforming stores in US as part of a reorganization to pump up profitability.

The Seattle-based company offered no information of which stores to be closed, only saying 70% of them had opened after the start of 2006.

“We committed to transforming the company through a series of critical and strategic initiatives to improve the current state of our US business and build the business for the long term,” said Howard Schultz, chairman, president and chief executive.

About 12,000 workers, tantamount to 7% of Starbucks' global work force, will be affected by the move, which is expected to take place between late July and the middle of 2009, spokeswoman Valerie O'Neil said.

In spite of the closings, Starbucks still plans to open new stores in fiscal 2009, with the number cut to fewer than 200.

“We believe we still have opportunities to open new locations with strong returns on capital,” said Pete Bocian, chief financial officer.

At the end of March, there were 16,226 Starbucks stores around the world, with 7,257 of them operating in the US and 1,867 abroad; the remaining 7,102 locations are run by partners who license the Starbucks brand. (Xinhua)

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