Starbucks abruptly closes dozens of NYC locations – Business News
Starbucks’ shock plans to close dozens of shops throughout New York City are claiming dozens of high-profile locations — and sparking chaos for workers, metropolis officers and landlords alike, The Post has realized.
The Seattle-based espresso giant – which laid off 900 company staffers final week in a $1 billion restructuring plan — is shuttering some 400 plus shops throughout the nation after reporting six consecutive quarters of gross sales declines.
Those embrace 54 espresso outlets throughout the town’s 5 boroughs, in accordance with the New York City Department of Consumer and Worker Protection. Among them are seemingly prime locations on the Upper East Side and in Greenwich Village, in accordance with a crowd-sourced spreadsheet being circulated to media this week.
Some 54 New York City Starbucks shops are closing. Niyi Fote/TheNEWS2 by way of ZUMA / SplashNews.com
Shops within the Upper West Side and the Financial District and Midtown Manhattan have been likewise affected — with shuttered locations within the latter together with 156 W. 52nd and 871 eighth Ave.
Across the town, landlords have been shocked by what insiders stated was an uncommon and chaotic method to the closures.
“They literally put signs in windows overnight without telling landlords and building managers,” Newmark Retail vice chairman Jeffrey Roseman informed The Post. “There was no warning, no heads up.”
Typically, retail tenants will attain out to their landlords to barter potential rent concessions, Roseman stated.
“There was no outreach to landlords in this case and that’s unusual for a company that’s not in bankruptcy.”
Historically, the 18,000 store chain within the US and Canada has “prided itself on having a story on every other block,” Roseman added.
A Starbucks spokesperson didn’t instantly reply to requests for remark.
“We identified coffeehouses where we’re unable to create the physical environment our customers and partners expect,” Starbucks CEO Brian Niccol — employed away from Chipotle a yr in the past to spearhead the company’s turnaround — stated In a Sept. 25 weblog post.
Brian Niccol was employed by Starbucks a yr in the past to spearhead a $1 billion turnaround. Andrew Schwartz/SIPA/Shutterstock
Starbucks is likewise shuttering espresso outlets “where we don’t see a path to financial performance,” Niccol added.
Nevertheless, the company could also be operating afoul of native labor legal guidelines, in accordance with a warning letter the town despatched to the java giant on Tuesday. Employees at shops which can be closing are entitled to be provided jobs elsewhere in the identical borough beneath the town’s Fair Workweek Law, the letter stated.
“Starbucks appears poised to violate its legal obligations to employees in New York City locations,” Department of Consumer and Worker Protection Commissioner Vilda Vera Mayuga stated within the letter.
Mayuga added that by law laid-off employees get first dibs on job openings close to the shops that closed. She gave Starbucks till Friday to elucidate how it should adjust to New York City labor legal guidelines.
Starbucks is going through a good storm of challenges, together with elevated competitors from newcomers and fast food chains like McDonald’s, which is testing a new beverage idea in 500 shops in Wisconsin and Colorado.
The Seattle-based espresso giant is closing more than 430 shops throughout the US and Canada. Gregory P. Mango
An aggressive labor marketing campaign by Starbucks United has resulted in 650 shops with labor contracts, of which 59 shops have been focused for closure in accordance with the labor group.
What’s more espresso costs have skyrocketed beneath new tariff insurance policies.
“I see a company that is struggling with sales trends and other major pressures,” analyst Mark Kalinowski.
In 2008, during the recession Starbucks closed 600 shops, Kalinowski stated.
