Push begun to keep Starbucks

Plan to close 600 shops stirs outcry

July 22, 2008|By The Wall Street Journal

Now that Starbucks Corp. has disclosed the 600 locations it wants to shutter, a phenomenon is taking hold: the Save Our Starbucks campaign.

In towns as small as Bloomfield, N.M., and metropolises as large as New York, customers and city officials are starting to write letters, place phone calls, circulate petitions and otherwise plead with the coffee company to change its mind.

"Now that it's going away, we're devastated," said Kate Walker, a facilities manager for software company SunGard Financial Systems who recently learned of a store closing in New York City.

It is an unusual twist in the saga of Starbucks, one of the fastest-growing retailers of the past decade. For years, Starbucks gained attention when a town didn't welcome it. Independent coffee shops complained about the big-muscled competition, and residents bemoaned the erosion of local character.

But ever since Starbucks announced this month that it would close 600 stores - including four in the Baltimore area - by early next year as its business struggles, the rallying cause has switched to saving these endangered locations.

Walker is in charge of consolidating 525 people from seven of her company's New York offices into a new building in January. The Starbucks inside that building, at Madison Avenue and 44th Street, "was something that we were using to psych people up" about the move, she said.

Her hopes were dashed last week when Starbucks released the list of the stores it plans to close.

Walker jumped on the Internet to find a phone number for the company's main office so she can ask officials to reconsider. "Knowing Starbucks, there's probably [another] one within a few blocks," she said. "But that's probably two blocks too far."

Starbucks spokeswoman Deb Trevino said company officials are discussing how to handle such pleas; she wouldn't give details of what they are considering. "It's not a simple answer," she said.

Although the states with the largest number of closings are California, Florida and Texas, the impact is greater proportionally elsewhere. Mississippi, for instance, is slated to lose 41 percent of its Starbucks; North Dakota, 33 percent; Minnesota, 32 percent; and Nebraska, 30 percent, according to an analysis by William Blair & Co. analyst Sharon Zackfia. That calculation excludes Starbucks stores run by third-party licensees.

Zackfia said the states with the highest percentage of closures include many with low population density and signify that Starbucks "expanded before some markets were ready," she said.

Online, several "Save Our Starbucks" petitions have popped up for stores across the country, including locations in San Diego, Dallas and New York.

The closures mean Starbucks will eliminate about 12,000 jobs, which comes out to 20 for every location it plans to shut. In addition to creating jobs and generating revenue, Starbucks outlets serve as key draws for other retailers, making the loss of one a blow to the surrounding area.

Bloomfield, N.M, also may make its case to Starbucks, said Jo Duckwitz, who works in the city's procurement office.

Duckwitz said she doesn't think that the customers in this city of fewer than 7,000 people will sorely miss the cafe but that it is a potential blow to the city's campaign to bring more shops to Bloomfield, she said.

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