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Starbucks sued over Teavana closures

Coffee company agrees to delay closure of at least 78 locations pending outcome of suit by big mall operator

Starbucks Corp. has agreed to delay the closure of at least 78 of its Teavana locations after a big mall developer sued the coffee company over the planned shutdown.

Simon Property Group, L.P., earlier this month filed a lawsuit against Starbucks, seeking to prevent the closure of the locations.

Starbucks agreed to hold off on closing those locations pending the outcome of a hearing set for October on an injunction that Simon requested seeking to stop their closure.

“We are responding to the lawsuit and are working to resolve this dispute,” a Starbucks spokesperson said in an emailed response.

A Simon representative did not respond to a request for comment. Nor did the company’s attorneys.

Starbucks in July said it would close all 379 of its Teavana retail locations. The closure comes amid a weak retail environment that has led to the closure of numerous specialty retailers around the country.

The company said that the retail stores had been underperforming, and that poor performance worsened this year.

“Despite efforts to reverse the trend through creative merchandising and new store designs, the underperformance was likely to continue,” Starbucks said in its closure announcement.

The closures come just five years after Starbucks agreed to pay $620 million for Teavana.

But news of the closure did not sit well with Simon, one of the world’s largest shopping developers. Teavana has locations in 78 Simon locations, according to court documents. That’s one fifth of all Teavana units.

According to the Indianapolis Business Journal, Starbucks indicated it plans to close the stores this year. Simon claims that Starbucks would be breaching its leases on the sites by closing the locations this year.

While some leases expire late this year or in 2018, most of them have years remaining on the leases, with two not scheduled for renewal until 2027, according to court documents.

Contact Jonathan Maze at [email protected]

Follow him on Twitter: @jonathanmaze

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