Despite the closings, Starbucks said that it will still be selling Teavana drinks in its Starbucks stores and bottled Teavana beverages at grocery stores.
American coffee house chain Starbucks is set to make a long-term investment in China, which is its fastest-growing market outside the United States, after the Seattle-based company posted quarterly profit that just matched analysts' estimates on Friday. The coffee giant announced the closure of all of its mall-based Teavana stores.
Starbucks CEO Kevin Johnson on Thursday noted declining foot traffic at malls.
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Starbucks also reported global sales growth of 4 percent at established locations, fueled by higher average spending per visit. In the previous quarter, the company warned that the stores were performing poorly, especially those based in shopping malls.
Starbucks' U.S. business - already suffering from heightened competition from meal kit sellers and convenience stores - has seen membership growth slow down due to changes made in its loyalty rewards program a year ago, analysts said.
Starbucks' shares were down 7.6 percent at $54.95 in early trading and the company was on course to shed about $7 billion in market value.
"Starbucks' growth potential in China is unparalleled", Johnson told the Tribune said during a phone interview Thursday. "And I highlighted the number of examples of companies and the work they're doing, you know, including the most recent discussion around Amazon's announcement to combine with Whole Foods". The majority of brick and mortar Teavana stores are located inside of these former consumer hotspots, so it's no wonder Starbucks Corporation has chose to do away with the flailing company.