Java mogul Howard Schultz and his company have decided to shut down 600 underperforming, company-owned Starbucks stores as the company is still in the process of restructuring. This decision also halves the company's expansion plan for 2009.
Although the company's share recently went up to 2.4% at $16, according to the CNN report, the store closures were already part of the strategy shift implemented since January of this year. CNN reports that most of the stores closing are located in the U.S. market and 70% of those stores opened in the past 2 1/2 years. Starbucks expects to fork over $8 million in severance pays - that's sounds like a latte (sorry we couldn't help it).
Schultz could only hope that this move could put the company back on track. But from the looks of things, frappucinnos aren't the cool thing to drink anymore these days. Maybe they should just start selling yogurt. Starberry? Now that's a product!