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SEATTLE -- Starbucks Corp. will close 600 U.S. stores this summer -- equal to 5 percent of its U.S. locations -- as part of a wide-ranging effort to boost its bottom line and the company's stock price, according to a report by the Seattle Times.
Most customers whose Starbucks stores close, however, will be only a short walk from a caffeine fix, the company said, as many of the unprofitable stores were being cannibalized by nearby Starbucks locations, the report stated.
As a result of the closures, up to 12,000 Starbucks workers will lose their jobs. The company said it will try to find positions for those employees within Starbucks, but it could be difficult with less than 350 new U.S. stores expected to open in the 2009 fiscal year, which begins Oct. 1. About 200 of the new stores will be directly operated by Starbucks, while the rest will be managed by other companies like bookstores and airport concession firms.
Starbucks officials said the closures are happening in "all major U.S. markets" between late July and March. Florida and California are among the largest states affected, spokeswoman Valerie O'Neil told Bloomberg News.
There were 2,496 stores in California and 625 in Florida in March. Those two states have been especially hard hit by the real-estate downturn and credit crisis.
"By far, this is the most angst-ridden decision we have made in my more than 25 years with Starbucks," Chief Executive Howard Schultz wrote to employees in a message posted on the company's Web site. "But we realize that part of transforming a company is our ability to look forward, while pursuing innovation and reflecting, in many cases, with 20/20 hindsight, on the decisions that we made in the past, both good and bad."
Starbucks originally had planned to close 100 underperforming U.S. stores as part of a turnaround strategy begun when Schultz resumed leading the company in January.