Closed Call
Starbucks’ plan to weed out 600 units is a drastic course correction, cutting across 44 states and altering the familiar routines of habitués from Birmingham, Ala., to Tukwila, Wash.
Patricia B. Dailey, Publisher, Editorial Director -- Restaurants and Institutions, 8/1/2008
Starbucks’ plan to weed out 600 units is a drastic course correction, cutting across 44 states and altering the familiar routines of habitués from Birmingham, Ala., to Tukwila, Wash. Fully 20% of the Seattle-based coffee colossus’ U.S. company-owned stores have been death-marked for quick demise. No restaurant chain in memory has marched forth so boldly when faced with a need to tamp down costs and restore a level of profitability that Wall Street unflinchingly demands. This newest round of shuttering, outlined in July, significantly ups the 100 stores that company founder and CEO Howard Schultz initially had on the hit parade.
Starbucks’ story has always played out larger than life, drawing attention that, at least early on, was so admiring that it verged on star-struck. And why not? Schultz had brilliantly hammered out a whole new segment, making the pursuit of foam-capped coffee aspirational for droves of Americans who came to believe that a life without double-tall lattes was a life barely worth living. Urged on by the call to goose up stock prices, the chain’s growth was as energetic as an overcaffeinated adolescent. As stores were added ad infinitum, industry analysts’ once-ebullient sense of awe turned first to raised eyebrows and then to a bitter blend of cynicism and scorn.
The call for growth at any cost began to dog Starbucks as soon as it went public, yet until the economy sputtered, any chinks in the company’s green-coated armor were buried in side notes. Missteps with too many new drinks and a fits-and-starts food program collided with miles-off-brand distractions—soft-rock CDs, book clubs and a strange foray into the movie business with “Akeelah and the Bee.” When a team is winning, though, strategies are scrutinized with less perspicacity; had boom times times continued, dissing on “Akeelah” would have been downright churlish.
Will paring 600 stores and 12,000 “partners” be enough to keep this once-venerable mermaid afloat? Hungry Howie can only hope it’s that simple. In January, Schultz resumed day-to-day responsibility for the company, and since then, he has brought out of mothballs other execs who helped build this seemingly indomitable brand. But even if he restores the dream team and brews up the mad-crazy passion that drop-kicked Starbucks to cult status, Schultz can’t control fallout from a faltering economy any more than he can reprogram the quirks of consumer behavior.
The Starbucks at which I was a regular patron closed quietly in June. Though sad, it was hardly surprising; the unit in Chicago, at 2475 N. Lincoln Ave., was an oddly shaped sliver of small with another Starbucks insanely close, at 2275 N. Lincoln. Thing is, I haven’t been to that one, or any Starbucks, since my haunt—the home of so many memories and caffeine-charged conversations—flipped out the lights as it bid me adieu. Habits, once established, can hold on tight, but bonds broken often stay that way—a truth that Schultz may not easily be able to remedy.


















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