Starbucks stole the spotlight at the end of July announcing that they would be shuttering all 379 of their newly acquired Teavana locations. This comes in a long line of not so much failed as abandoned ventures by this coffee giant. There was the handcrafted sodas of 2012 and then the coffee delivery concept of 2014. This was followed by evening time wine in stores of 2016, and then a back to back closure of their two most recent acquisitions. Even more recently their very own online retail store.
But for the sake of our passion for Starbucks, the majority of consumers nodded quickly at accepting the ‘Malls are Doomed’ bandwagon shared by the Starbucks execs when questioned about their motives for shutting down all locations. And I understand, with the recent shuttering of mall classics such as Bebe and Wet Seal, as well as the ever misrepresented restructuring of JC Penney this could seem like a plausible reason. But something about it just did not settle well with this shopgirl.
“Over the last several years many mall-based retailers have been adversely impacted by reduced foot traffic, resulting from the accelerating shift of consumer behavior away from brick-and-mortar retail and changes in consumer retail activity overall,” said Scott Harlan Maw, Starbucks CFO. “Our Teavana mall stores have not been immune, with many reporting negative comps and operating losses for some time.”
I know a man named David Simon who would greatly disagree with that statement. This is a battle Mr. Simon is all too familiar with and quite frankly has had enough of it. His malls are successful, he speaks out against the naysayers:
And I could counter that by pointing [out] that we have 434 department stores in our portfolio, and only one is vacant, and how in the recently announced department store closing, we have only one closure in our portfolio, or how we have added more than 275 sit-down or quick-service restaurants, more than 20 entertainment concepts and more than 80 big-box tenants across our portfolio over the last four, five years, or how we’ve added mixed-use components to our centers in the last several years, we have built 10 hotels and residents representing nearly 3,000 units.
Shopping is about the experience, Starbucks forgot to maintain the tea expertise experience when acclimating their new business ideals onto their employees. The new store concepts are cold, and though beautiful, do not provide an area for gathering or any other features that seem, in my humble opinion, to really amplify the experience of it all.
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Malls are not dying, they are evolving, and for retailers lacking in visionaries to emerge beyond the stereotypical "shops of the over saturated retail world of the 1990s" will not survive. To prove this point, mall management giants Simon and GGP purchased a fleeting @aeropostale this past fall and reopened 500 locations that following January with a more immersive shopping experience. I'm excited to watch the journey of this venture! Have you been in an aeropostale since January? What are your thoughts? #quotes
In fact Mr. Simon is so disappointed in Starbucks that he has indeed announced to be suing the company for 78 unfulfilled leases, postponing these particular closure dates a few years. This is not a decision made for his own interest but the interest of the entire mall business community:
“A shopping center is not merely a random collection of stores,” lawyers for Simon write in their complaint. “Rather, it is a co-dependent ecosystem of tenants with a complex system of governance that ensures its wellbeing.”
The Starbucks-Teavana Experience
The acquisition always rubbed me wrong, as Starbucks has never been a company to fully understand the intricacies of tea preparation with theories such as: a 32 oz paper cup of scalding water and a single tea bag should do the trick.
When I visited the Teavana at Altamonte Mall in Orlando this past Spring I was delightfully surprised to find that I was no longer feeling pressured to purchase over $100 dollars of tea leaves, as was pushed by the previous owners. But I also realized that this new crew knew not half as much about tea as the team of five years ago did. They weren’t a walking encyclopedia of individual tea benefits, brewing temps or times.
When I requested a cup of the overplayed Teavana classic combination of Strawberry Lemonade and Jasmine Pearl Tea I was looked at as if I had just spoken to them in greek. Both teas they carry, but neither names they recognized. They went on to explain that one could no longer order off the polychromatic wall, but now had a select five or six brews to choose from. This was a smart choice for Starbucks, only, I could not find a flavor that sounded appealing to me so I passed.
The experience had definitely changed. The push on sales goals had obviously been alleviated, but in turn, so was the push for product knowledge and customer experience.
What about the Jobs?
Approximately 3300 employees will be affected by this change. With options to apply to Starbucks which is opening freestanding locations at a rate of one shop a day worldwide and a prospect of creating 68,000 jobs in the U.S. over the next five years, so says the Retail Historian of Instagram:
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Bad news for tea lovers! Starbucks is closing every single one of its Teavana retail stores after a strategic review of the business. Many of the 379 Teavana stores, which are primarily mall-based, have been underperforming. Starbucks said it tried to improve sales through creative merchandising and new store designs, but it just wasn’t working. The stores will close over the coming year, with the majority shutting down by next spring, according to a news release. The approximately 3,300 employees who will lose their jobs as a result of the closures will have the opportunity to apply at Starbucks stores. Starbucks said it plans to create 68,000 jobs in the U.S. over the next five years. #retailhistorian #retail #retailproblems #closedstore #teavana #starbucks #tea
So Is This a Good Thing or A Bad Thing?
At the end of the day Starbucks will be Starbucks and tea is tea. Teavana is not all dead as a very select variety of teas will be served at Starbucks locations. Starbucks will flourish from the fall as I’m sure they will continue to ravage through a portfolio of failed concepts. And with Teavana off the market, it’s the prime time for any small tea business that may provide a greater shopping experience to take the reins and really grow. Everybody wins.
Until Next Time Fanboys and Girls:
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