Starbucks to close 250 North American stores

Closed coffee shop with stacked chairs illustrating SBUX North American store closures news

Key Points

01Starbucks (SBUX) will close about 250 North American stores, or roughly 1% of its footprint
02Closures target locations lacking strong customer experience or financial performance
03The company expects about $300 million in restructuring charges from the move
04Local closures include seven stores in San Diego County and at least four in Ohio

Starbucks outlines new wave of store closures

Starbucks (SBUX) is preparing to close approximately 250 coffeehouses across North America, a move it says affects about 1% of its more than 18,000 locations in the region. The action represents a targeted reduction in its retail footprint rather than a broad-based retrenchment.

The company said the closures focus on stores where it does not believe it can consistently deliver the customer and employee experience it expects, or where it does not see a path to acceptable financial performance. These criteria frame the initiative as a portfolio reset aimed at underperforming or structurally challenged locations.

Financial impact of the restructuring

Starbucks (SBUX) expects to record approximately $300 million in restructuring charges tied to this round of closures. About $200 million of that total is projected to be cash costs, largely associated with exiting leases and providing separation-related benefits.

The remaining roughly $100 million is expected to be non-cash charges, including asset impairments and disposals related to the affected stores. These figures highlight that the closures carry both immediate cash outlays and accounting impacts as the company adjusts its store base.

Plans for affected employees

Starbucks has stated that it aims to place affected employees at nearby stores whenever possible. This approach is intended to preserve employment for workers in markets where the company maintains a strong presence and available roles.

For employees who cannot be reassigned, Starbucks plans to provide severance support. The company has not detailed specific terms, but it has framed severance as part of the broader restructuring cost estimate tied to the closures.

Local markets already seeing identified closures

Local reporting has begun to identify specific stores that are part of this round of closures. In San Diego County, seven Starbucks locations are set to close under the current plan.

In addition, at least four Starbucks locations in Ohio have been identified for closure. Starbucks has not yet released a complete, store-by-store list of impacted sites, so further locations across North America may still be confirmed at the local level.

Key Takeaways

01The planned 250 store closures represent a selective pruning of Starbucks’ North American portfolio rather than a broad retrenchment.
02Financially, the initiative carries a sizable restructuring cost, with meaningful cash outlays and non-cash charges that will affect reported results.
03Workforce impacts are being managed through transfer opportunities and severance, signaling an effort to balance cost reduction with employee support.

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