Starbucks is shutting down its struggling Teavana chain, and relying on customers who spend more on pricier drinks and food to drive up sales at its namesake coffee stores.
The company reported disappointing global sales growth on Thursday, and said it will close all 379 Teavana locations over the coming year. It had acquired the U.S. mall-based chain in 2012, with then-CEO Howard Schultz citing the huge potential for the tea market. But in April, the company said it was reviewing options for the chain.
According to Teavana’s website, there are currently 4 locations on Long Island, in Bay Shore, Garden City, Huntington Station and Lake Grove.
Starbucks CEO Kevin Johnson on Thursday noted declining foot traffic at malls.
“We felt it was an appropriate time to take the decision and begin shutting down those stores,” he said.
The announcement came as Starbucks said global sales at its flagship chain rose 4 percent at established locations for the quarter ended July 2, fueled by higher average spending per visit. In the U.S., sales rose 5 percent at established locations, also driven mostly by higher spending versus an increase in customer visits.
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