Starbucks on Rehoboth Avenue in downtown Rehoboth Beach will close "by the end of the week," a note posted on the door of the business said Sept. 25.
The same day, Starbucks CEO Brian Niccol announced in a memo to employees that an undisclosed number of stores nationwide will be closing and 900 non-retail position will be eliminated.
"We’re working hard to offer transfers to nearby locations where possible and will move quickly to help partners understand what opportunities might be available to them," the announcement said. "For those we can’t immediately place, we’re focused on partner care including comprehensive severance packages."
Though Niccol's memo didn't say how many stores will close, it did say Starbucks will have about 18,300 coffee shops in the U.S. and Canada when its fiscal year closes at the end of September, down from the 18,734 listed in the company's June 29 store count.
It's not yet clear if any other Delaware stores are closing.
The Starbucks Workers United union also shared a statement Sept. 25.
"Fixing what’s broken at Starbucks isn’t possible without centering the people who engage with the company’s customers day in and day out," the statement said. "Starbucks is talking a big game about cost cutting, but at the same time paid Brian Niccol $98 million last year and spent over $80 million on a glitzy managers-only conference in Las Vegas this June. "
Why Starbucks stores are closing
The decisions were made in support of the "Back to Starbucks" plan, which Niccol rolled out earlier this month.
The plan includes helping "every coffeehouse to deliver a warm and welcoming space with a great atmosphere and a seat for every occasion," the announcement said. A review "identified coffeehouses where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance," Niccol said. Those are the stores that will be closed.
At the same time, Starbucks is planning to open new stores, the announcement said, and over the next year, over 1,000 stores will be renovated "to introduce greater texture, warmth, and layered design."
As for the 900 non-retail layoffs, Niccol said they will be notified Sept. 26 and offered "generous severance and support packages including benefits extensions."
Niccol has been chairman and CEO at Starbucks for about a year. Prior to that, he served as chairman and CEO at Chipotle Mexican Grill, where he more than doubled the business, his Walmart biography says. Niccol also serves on the board of directors at Walmart.
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Shannon Marvel McNaught reports on southern Delaware and beyond. Reach her at [email protected] or on Facebook.