29th Jul 2008 - 00:00
Abstract
Starbucks has today announced that 61 of its underperforming branches will be shutting under plans to restructure the Australian arm of the business.
Focussing on three core cities and surrounding areas: Brisbane, Melbourne and Sydney, the 61 outlets will close by the 3rd August 2008. Howard Schultz, chairman, president and CEO, Starbucks said: "In January 2008, we developed strategies to transform the company for the future. Now, we are well into the implementation phase of transforming Starbucks and we believe that this difficult, yet necessary, decision to close stores in Australia will help support the continued growth of our international business." Schultz reinforced that other markets are currently safe: "While this decision represents business challenges unique to the Australian market, it in no way reflects the strong state of Starbucks business in countries outside of the United States. There are no other international markets that need to be addressed in this manner." The US media has reported a dip in customer spending over the last few months resulting in many analysts predicting the company is in trouble, as profits fell in earlier this year by 28%.