Starbucks plans to close 150 locations

Signage at a Starbucks store in New York

Signage at a Starbucks store in New York

For a chain that has so many stores that they often in sight of each other, Starbucks said Tuesday is finally ready to pull the plug on more of its losers.

Closing stores is not new for businesses, but the 150 figure is almost three-times the average for the company.

The affected stores are located in mostly urban areas that are densely populated with Starbucks locations.

The resulting policy change prompted the mega-retailer to allow all persons to use the restroom facilities without requiring a purchase, effectively turning the neighborhood coffee shop into what some customers described as a "homeless shelter". It says it generally averages closing up to 50 stores a year.

"Same-store sales comparisons are slowing".

Starbucks' Executive Chairman and co-founder Howard Schultz said earlier this month that he is stepping away from the company on June 26, ending an era.

"It seems fairly clear that the low-hanging fruit on causing everybody to get addicted to their (Starbucks) fantastic products is kind of in the rear-view mirror", said Tony Scherrer, director of research at Smead Capital Management".

Starbucks apologized and closed 8,000 stores in May for anti-bias training after the arrests of two black men in one of its Philadelphia cafes sparked wide-spread protests. Investors reacted to news that Starbucks could experience its worst performance in about nine years by sending the shares down 3.8% in pre-market trading.

"We're putting more of our energy into that afternoon day part and the portfolio of beverages that are offsetting some of the declines we're seeing in Frappuccino beverages", Johnson said.

The report also indicates the 150 closures are about three times as many as the company usually closes.

Starbucks said it now expects earnings in the range of $3.23 to $3.26 a share for the current fiscal year, down about a dime from its previous targets.

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