Sunday, January 14, 2018

[UPDATE] SIMON Says Starbucks May Close Teavana Stores, Others to Close Soon

Teavana, the Atlanta-born tea business purchased in late 2012 by Starbucks, was announced to be closing all 379 stores this past July.  Starbucks said at the time that the chain of tea shops were "struggling and would likely continue doing so."  Indianapolis-based mall owner Simon Property Group filed a lawsuit in Marion County, Indiana in August to prevent Starbucks from closing stores in Simon-owned malls, numbering 77 at the time of the announcement.    
Teavana at Phipps Plaza courtesy of Rasheed Stevens 
In November, Simon got a judge to issue a controversial injunction barring the closings.  The closings could injure Simon — and Starbucks could afford to keep the [77] units open, Simon said in court papers.  Starbucks appealed the ruling and in December, in a rare move, the state’s highest court agreed to hear the case, bypassing the intermediate Court of Appeals panel.  But before the appeal could be heard, the case was settled.  “We’ve reached an agreement with Simon to settle our dispute,” Starbucks spokeswoman Sanja Gould told The New York Post.  Terms of the agreement were not disclosed.  

With its suit with Simon settled, Teavana is wasting no time shuttering its stores in Simon Property Group-owned malls.  According to sources at local Teavana stores, liquidation sales started earlier this week, with The New York Post reporting late Friday evening on the settlement.  

Teavana's seven locations in metro Atlanta began liquidation sales Tuesday, according to employees at the chain's Phipps Plaza location.  Stores in Simon-owned malls, Lenox Square and Phipps Plaza in Buckhead, Town Center at Cobb in Kennesaw and Mall of Georgia in Buford, are all offering 75% off of all in-stock merchandise.  According to store associates, the Phipps Plaza location is to close at the end of business today, Sunday January 14, while the stores in Lenox Square, Town Center and Mall of Georgia are expected to close at the end of business on Monday January 15.   

A number of other Teavana stores are also slated to close Monday in other high profile Simon malls in other markets including SouthPark in Charlotte, Town Center at Boca Raton in Boca Raton and Roosevelt Field on Long Island.  

Teavana stores in Perimeter Mall in Dunwoody, North Point Mall in Alpharetta, Cumberland Mall near Vinings and at Augusta Mall in Augusta began 50% liquidation sales this week, but have reportedly not been informed when their stores will close for good.  The remaining Georgia stores are in malls owned by General Growth Properties, a Chicago-based firm that was surely displeased by the planned closures, but never took any legal action against Starbucks/Teavana.  

One employee at a Teavana in a General Growth-owned mall indicated that company executives had told Teavana team members that they would receive 30 days notice in advance of any closure.  The employee indicated that the Atlanta stores (specifically those in Simon malls) were given a mere five days notice, something employees at their store found unsettling.   

Real estate sources tell ToNeTo Atlanta that all Teavana stores will likely be closed by the end of January.  

Are you surprised that Simon sued Teavana to keep the locations in their malls open?  Do you plan to, or have you already, purchased anything from the liquidation sales at Teavana?  What would you like to see open in the soon to close Teavana shops in metro Atlanta?

Please share your thoughts below.  

3 comments:

Anonymous said...

The store at lenox today was almost empty I assumed today was the last day. Almost nothing left

spiehler said...

Why should I be surprised? Starbucks is in violation of the lease by shutting the TeaVana stores. Simon sued to protect their interests. Biz 101.

Anonymous said...

Starbucks has saturated the planet with their coffee shops and now their growth has slowed dramatically. Three quarters of the planet has a cup of tea every day, yet they couldn't find a way to turn Teavana into a new growth engine? What a wasted opportunity.