Starbucks says it will close 600 company-operated stores in the next year, in a sign the coffee shop operator is struggling with the faltering US economy and its own rapid expansion.
Seventy per cent of the stores slated for closure had opened since the start of 2006, the company said in a statement.
To put it another way, Starbucks is closing 19 per cent of all US company-operated stores that opened in the last two years, chief financial officer Pete Bocian said during a conference call.
About 12,000 workers, or seven per cent of Starbucks' global work force, will be affected by closures expected to take place between late July and the middle of 2009, spokeswoman Valerie O'Neil said.
O'Neil said most employees will be moved to nearby stores, but she did not know exactly how many jobs would be lost. Starbucks estimated it would pay $US8 million ($A8.38 million) in severance costs.
It was not immediately clear if the closures would affect Australia, where Starbucks has 85 coffee shops after opening its first outlet in Sydney in 2000.
Some analysts had wondered whether Starbucks' explosive growth in the US would come back to haunt it as the market became saturated.
But before Tuesday, the company had avoided acknowledging that saturation was an issue, and pinned weak financial results and adjustments to new store openings on the economy.
Starbucks still plans to open new stores in 2009, but on Tuesday cut that number in half to fewer than 200. The company did not adjust its plan to open fewer than 400 stores in 2010 and 2011.
At the end of March, there were 16,226 Starbucks stores around the world. The company operates 7,257 of those stores in the US and 1,867 abroad; the remaining 7,102 locations are run by partners who licence the Starbucks brand.
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